Audio-books: VAT

Baroness Rendell of Babergh: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In so doing, I declare an interest as an author of books on tape.
	The Question was as follows:
	Whether they will consider removing the VAT on audio-books on the grounds that these are extensively used by the visually impaired.

Lord McIntosh of Haringey: My Lords, the Government recognise the importance of audio-books to the visually impaired. However, under longstanding European agreements, no member state is permitted to make substantial extensions to the scope of its zero rates.

Baroness Rendell of Babergh: My Lords, I thank the Minister for his Answer. However, does he agree that, when VAT was introduced in 1973, the audio industry was virtually non-existent? Does he also agree that if the Treasury were rewriting rules now, it might take a different view?

Lord McIntosh of Haringey: My Lords, there are certain dangers in the Treasury rewriting the rules. We benefit very substantially from the fact that, when Annex H to the Sixth Directive was introduced in 1992, we already had zero rating not only on books and newspapers, in particular, but also on children's clothes, food and public transport fares. We were able to continue that because we already had the exemption. If we were to start re-opening the Pandora's box of zero rating, we could put that at risk. Much as I sympathise with what the noble Baroness, Lady Rendell, says about audio-books, I think that on the whole we would prefer not to do that.

Lord Campbell of Croy: My Lords, does the noble Lord accept that audio-books have been of great help to blind people, especially when the voices have been recorded by actors and actresses, and that they are available for lending from public libraries?

Lord McIntosh of Haringey: My Lords, I entirely agree that audio-books are a great help to blind people. The Royal National Institute for the Blind, after all, has a scheme of talking books for the blind to which it has about 43,000 subscribers. That equipment and that provision is zero rated. Zero rating, however, must be for equipment specifically designed for people with disabilities, and we take advantage of that exemption. However, audio-books are also of very great interest to others who are not visually impaired.

Lord Peston: My Lords, surely the anomaly here, to introduce a discordant note, is the fact that not only books, but magazines, periodicals and pornographic literature—if I may remind my noble friend of the existence of such things; I know because I know the law, not because I have ever seen such things—are zero rated? Is it not strange that we refer to that zero rating as a benefit when the essential point is that VAT really should be levelled on everything? Is it not about time that instead of talking about this benefit, we got rid of the anomaly entirely?

Lord McIntosh of Haringey: My Lords, I am always prepared to take instruction from my noble friend Lord Peston. However, I disagree. The zero rating which we have for children's clothes, food, books and newspapers, and public transport fares is a very considerable advantage to us. It is indeed in the Labour manifesto that we shall continue to maintain that zero rating.

Lord Renton: My Lords, is the noble Lord aware that audio-books are also a great help to those who are deaf? That is a further reason for liberating them.

Lord McIntosh of Haringey: My Lords, I am interested in what the noble Lord, Lord Renton, says, and I suppose that audio-books could be played very loud. Audio-books are a great pleasure to a very large number of people, including me. I just wish that the readers would read rather faster than they do.

Lord Addington: My Lords, does the noble Lord agree that, by taxing audio-books, we are basically just attacking another form of literature? As literature is said to be a good thing, why are audio-books not treated as such?

Lord McIntosh of Haringey: My Lords, I have been trying to explain that these anomalies have occurred because of the Sixth Directive, and particularly because of Annex H to that directive. There are changes that we might like to make if the lid were taken off this Pandora's box. However, we are, rightly, very nervous about doing that because of the advantages that we gain. I would not argue for significant changes for that very reason.

Lord Selsdon: My Lords, will the Minister be kind enough to advise us how many people in the United Kingdom and the EU are visually impaired? If by any chance the numbers are significant, would he please arrange to change the directive?

Lord McIntosh of Haringey: My Lords, I do not know how many, but clearly it is a very significant number. However, I do not see why that should justify a change in the directive. The directive is very significantly to our advantage.

Lord Saatchi: My Lords, if the Pandora's box can never be opened, can the Minister say why, in another place, the Paymaster General said that no accurate estimate is available of the cost to the Exchequer of zero rating audio-books? Why is there no such estimate? May we have one?

Lord McIntosh of Haringey: My Lords, I imagine that there is not one because useful sales figures for audio-books are not available. I do not know the answer to the question, but I do not think that the cost of zero rating audio-books has been a significant factor in our consideration of the issue raised by this Question.

Baroness Finlay of Llandaff: My Lords, given the difficulties outlined and the importance of audio-books to patients recovering from severe injury who are unable to hold conventional books or who have brain tumours and difficulty focusing on a page although they are not classified as visually impaired, do the Government have any intention of trying to provide some financial relief for families faced with caring for those with a severe disability for whom audio-books are a major source of comfort?

Lord McIntosh of Haringey: My Lords, as I have made clear, the Government maintain zero rating of VAT for all sorts of equipment and material specifically designed for those with a wide range of disabilities and not just for those with visual impairment. The difficulty with some of these issues, and particularly with audio-books, is that although they are indeed of great help to people with various disabilities, they are also a source of great pleasure to people without disabilities. To introduce a zero rating, even if we could, would be to introduce a further anomaly into the zero-rating system.

Lord Swinfen: My Lords, the noble Lord said that children's books were zero rated. Are audio-books for children zero rated?

Lord McIntosh of Haringey: My Lords, I did not say anything about children's books; I said children's clothes. There is no connection between the two.

Travel Documents

Lord Selsdon: asked Her Majesty's Government:
	What documentation is acceptable as proof of identity to permit British subjects to travel without let or hindrance within the European Union.

Lord Rooker: My Lords, a British passport is the only official document issued in the United Kingdom which establishes both the holder's identity and nationality for travel purposes within the European Union, or anywhere else for that matter.

Lord Selsdon: My Lords, while thanking the Minister for his gracious reply, and not wishing to correct him in any way, perhaps I may remind him that, on the back of our parliamentary passes, it states,
	"THIS PASS IS AN OFFICIAL DOCUMENT".
	Will the Minister therefore give consideration to obtaining authorisation for noble Lords to travel without let or hindrance throughout the EU as we have a pass which states that it is an official document? Further, can he tell me why it is necessary for British subjects abroad sometimes to present their passport at least five times before arriving at an airport and clearing Customs in the United Kingdom?

Lord Rooker: My Lords, I think that that is a preposterous suggestion because the photo-identity pass does not identify the person concerned. It might state that it is an official document, and the notice to turn it in to a police station if lost is helpful, but what on earth does that really tell anyone? I therefore find it difficult to take the suggestion seriously.
	As for the serious part of the noble Lord's Question, various nationality and identity issues need to be addressed. Although the barriers are more or less down in a common area, even airlines, for their own security, like passengers to show a photo-pass. That may not be a requirement but they like to know who is on the plane, for various reasons. As far as the United Kingdom is concerned, the only document that covers both nationality and identity is the passport. That rules out such documents as the photo driving licence, for example.

Lord Clark of Windermere: My Lords, is my noble friend aware that an increasing number of our European Union partners now insist that holders of British passports must have passports with at least six months still to run before they are allowed to enter those countries? Is that a fair way to permit freedom of travel within the European Union? Does my noble friend realise that it clearly reduces a 10-year passport to a 9½-year one?

Lord Rooker: My Lords, my noble friend makes some important points but his final sentence is incorrect. We changed the rules on that matter some time ago. Some countries require travellers to have passports with a minimum of six months still to run as a condition of supplying a visa. I refer to the efficiency of the Passport Agency. I take no credit for its performance as the Minister responsible for it. It is one of the most efficient executive agencies in government and processes 100 per cent of normal passport applications within 10 days. If one applies in sufficient time, the Passport Agency will extend the relevant date of a passport to prevent people losing out and having, in effect, a 9½-year passport.

Lord Campbell-Savours: My Lords, on a number of previous occasions when speaking from the Dispatch Box my noble friend has used the term "entitlement card". Will he review that language and refer to the entitlement card in future as the national identity card as that would be much easier for people to understand?

Lord Rooker: My Lords, the Home Office-speak is "entitlement card". As I have said repeatedly—I am grateful to my noble friend for reminding noble Lords of this matter—in the summer we shall produce a consultation paper on the possible uses of entitlement cards. The consultation period will be much longer than usual to permit a national debate on the issue. Given the configuration of dates involved in this matter, the date of 21st May with regard to British overseas citizens and the constant references to Gibraltar in this House, I should say in case I am asked about the matter—in that way I shall avoid being asked about it—that the Gibraltarian passport, which is a British dependent territory passport, allows free, unhindered travel within the European Union.

Lord Redesdale: My Lords, does the Minister consider that it is strictly relevant to have babies of under six months photographed for passport purposes? I make that point as this afternoon I shall have to take my daughter who is under three months and stick her in a photo booth. I believe that the photograph will resemble just about any baby of that age.

Lord Rooker: My Lords, technical discussions are taking place with regard to biometrics and passports. In due course there will be an international requirement for passports to be produced with the use of biometrics. That requirement will apply irrespective of the use of identity cards or entitlement cards. I am told that it may be possible for the photograph to involve the use of biometrics in facial scanning. I did not inquire about the minimum age at which facial scanning is accurate. However, I suspect that it is not three months.

Lord Dixon-Smith: My Lords, is the Minister aware that I have every sympathy with anyone in another European country who will not accept a pass of a Member of this House as proof of identity? I cannot even use my pass as proof of identity in some of the larger London stores. There is a problem in that regard. However, as increasing numbers of people travel there is an increasing need to simplify the matter. Given the Prime Minister's new found enthusiasm for European issues, should not this matter be looked at urgently? Whether it is decided to have an entitlement card or an identity card it seems to me that that will be the way in which the Government will be forced to move.

Lord Rooker: My Lords, it is not a question of being forced to move. It is well known, as it has been published in the business plan of the Passport Agency, that in due course it is proposed to issue a passport card to make travelling easier. That would not be a substitute for a passport but would be issued in addition to it. There is already an experiment under way at Heathrow as regards fast scanning of frequent travellers. Frequent travellers can register with an iris scan, for example, and will not require a passport. They will not need to queue at passport control as they can be scanned. We are introducing such initiatives to make travelling easier. Some 90 million people move in and out of the country each year. We want to make travelling as convenient as possible for the majority but ensure that we keep out or apprehend the minority whom we do not want. We are moving in that direction. That matter may be included in the consultation paper on the entitlement card.

Lord Grenfell: My Lords, does my noble friend the Minister recall that the late and great Lord Hunt of Everest fame said that if you look like your passport photograph you are too ill to travel?

Lord Rooker: My Lords, I plead guilty. I do not know whether I am one of the younger Members of the House but I do not like my photograph and I shall get it renewed as soon as possible.

British Transport Police

Lord Bradshaw: asked Her Majesty's Government:
	Whether they intend to add the British Transport Police to the 10 police forces prioritised under the national robbery initiative.

Lord Rooker: My Lords, the matter is being considered but the British Transport Police are already closely involved in activity to tackle street crime, working jointly with the various police forces. The Government intend further to enhance the role played by the British Transport Police, particularly in the London area which accounts for over 50 per cent of street crime across the 10 targeted areas and some 88 per cent of the incidents of robbery within the total British Transport Police jurisdiction.

Lord Bradshaw: My Lords, I thank the Minister for that reply. The British Transport Police apprehend many street robbers—I believe that they are about fifth or sixth in the relevant table—and the 10 forces have extra resources. Will the Minister say specifically whether the British Transport Police can also be given extra resources to fund either personnel or equipment to cover the many places around London stations where street robbers are active?

Lord Rooker: My Lords, I cannot give details about any future money for the British Transport Police. The total strength of the force is just over 2,100. If one disregards the headquarters total, which is 100, that leaves just over 1,000 personnel in London. Half of the personnel of the British Transport Police work in London, 300 in both north and south London and 400 on the Underground. That is an enormous resource. They are involved in the work of the safer streets initiative in London in particular. I understand that exercises are taking place with regard to Connex special constables. Connex staff are being trained and accredited as special constables under the sponsorship of Connex although they are special constables for the British Transport Police. I understand that so far 130 employees have shown an interest in the scheme. It is planned to have 30 Specials sponsored by Connex. I understand that 16 commenced training on 15th April. Work is taking place to improve the "up front" appearance and presence of the British Transport Police, particularly in the London area.

Lord Berkeley: My Lords, does my noble friend accept that if half the British Transport Police are stationed in the London area, there are not many of them in other areas where an enormous amount of vandalism takes place? I refer to the North West, Yorkshire and Humberside and the North East. I assume that their remit covers Scotland. Is not the balance a little out of kilter?

Lord Rooker: My Lords, not as regards where the crime takes place. My noble friend mentioned Scotland. Some 200 British Transport Police cover Scotland. That is some 10 per cent of the total. They operate also on the national rail networks, the Docklands Light Railway, the Croydon Tram Link and London Underground. They do not operate on the road network or in Northern Ireland. As I said in my initial Answer, the London area accounts for over 50 per cent of street crime across the 10 targeted areas of the street crime initiative and some 88 per cent of the incidents of robbery within the total British Transport Police jurisdiction. Therefore, the concentration of British Transport Police in London is justified.

Lord Dixon-Smith: My Lords, is the Minister aware that the Mayor of London is doing his best to enter into contractual arrangements with the Metropolitan Police to purchase in effect additional policemen specifically to cover bus services? Does the Minister consider that that represents a good vote of confidence in the existing arrangements given that it will obviously provide a welcome improvement in the situation?

Lord Rooker: My Lords, the one way to make transport safer in London—and what the Metropolitan Police want to do—is to include in the Police Reform Bill the community safety officers accreditation scheme to enable the Metropolitan Police to appoint some 300 or 400 extra personnel on the streets of London this year, including a good proportion who will be supervised by London Transport. I hope that when the Bill returns to your Lordships' House in due course the scheme will receive the approval of noble Lords and that the Metropolitan Police will be able to introduce it.

Lord Wallace of Saltaire: My Lords, are the Government reconsidering the whole balance between specialist forces and territorial forces within the police? Specialist forces represent some interesting historical anomalies—the origins of railway company police and so on. When considering legislation in this House, we have discussed the overlap between specialist forces and territorial forces. Is there a case for the Government looking at specialist forces—I forget exactly how many there are; I believe, eight or nine—and the territorial forces as a whole?

Lord Rooker: My Lords, I shall have to take advice on that. I know of no moves in that regard. We debated specialist forces during the passage of the Anti-terrorism, Crime and Security Act, including the Ministry of Defence Police, the Atomic Energy Authority Constabulary—which is an armed police force with a specific remit—and the British Transport Police. I know of no discussions that would lead to the conclusions raised by the noble Lord.

Lord Faulkner of Worcester: My Lords, does the Minister agree that it does not make much difference to a victim of crime whether he is robbed on the Underground or in the street? Does he find it a little odd that the Home Office forces—10 of them—will be given substantial extra money to deal with robbery, which we all welcome, but that the British Transport Police, which saw a 29 per cent rise in robberies last year, are apparently having to struggle to get the modest £1.43 million for which they asked the Home Office?

Lord Rooker: My Lords, that would probably be a consequence of the spending review later on. Of the 2,700 robberies reported to the British Transport Police, 581 were cleared up. That involves a detection rate of 21 per cent. Their current budget is around £120 million. I stress that the British Transport Police are actively involved with the police around the country through the street crime initiative in Merseyside, Lancashire, Manchester, Thames Valley and the West Midlands where they are actively involved with what I call the Home Office police on a series of initiatives. They are currently doing that. There is not a question of their needing money to participate in such initiatives.

London Underground: Funding

Lord Ezra: asked Her Majesty's Government:
	Whether there is likely to be a shortfall in the funding of the public/private partnership arrangements for the London Underground.

Lord Filkin: My Lords, the Government will ensure that London Underground has sustained and secure funding to meet its contractual obligations to the infrastructure companies for delivering the massive increase in investment under the Tube modernisation plans.

Lord Ezra: My Lords, is the Minister aware that there have been recent reports that the funding arrangements could lead to substantial increases in fares to make up the amounts of money that are required by London Underground? Figures of up to 25 per cent have been mentioned. Will he give the assurance that that is unlikely to happen and that if there are to be any fare increases, they will be limited to the rate of inflation? Furthermore, will he give an assurance that, in light of the tragic accident at Potters Bar, increased attention will be paid to the supervision of maintenance by contractors on the Underground?

Lord Filkin: My Lords, on the noble Lord's first point, there are many rumours—most of them wrong—about the major PPP for London Underground. The decision about fares on the Underground will be for the Mayor, in consultation with the Assembly. So far as the Government are concerned, we have set the subsidy to go into the PPP for the first seven and a half years at a level that should not require fare rises that are higher than the rate of inflation.
	With regard to Potters Bar—we could have had a topical Question on it—it is early days to make judgments about what happened. The Health and Safety Executive and others are rapidly investigating the causes so that we can ensure that any lessons are learnt rapidly. I can report to the House that London Underground has completed an inspection of 80 points on the Underground system that bore some similarities to Potters Bar, but it has found no faults with them.

Viscount Astor: My Lords, I take the Minister back to the PPP, which is what the Question on the Order Paper is about. He will be aware that the three members of the consortia that were recently awarded a contract for London Underground have announced that the contract will return an annual profit of £18 million a year, which is £540 million over the lifetime of the contract. That represents a 34 per cent return on turnover. When one considers that 95 per cent of the third party debt is covered by a letter of comfort from the Government, how can the Minister tell the House that that represents good value for the taxpayer?

Lord Filkin: My Lords, I am happy to confirm that the Government judge—as do London Underground, Ernst & Young, which advised the Government, and the accountants who advised London Underground—that that did provide good value for money. There are two reasons for that. First, I do not recognise the figures quoted by the noble Viscount, Lord Astor. I do recognise that the infrastructure companies have budgeted for or are hoping to achieve—that is different—a return of 15 to 20 per cent on their capital employed. That relates only to the capital that they put in and not to the contractual value of the contracts that will be let, which are substantially subsidy-funded as well as being funded by equity from the infrastructure companies.
	The second point, which goes to the heart of the reason why we believe that the PPP will demonstrate good value for money to the public, involves the appalling cost over-runs on previous infrastructure projects. The noble Viscount will know better than I do, because this happened when his party was in government, that the Jubilee Line was three years late and, I believe, some 60 per cent over cost. Moreover, the Central Line extension—in fact, it was another extension—was several years late and involved substantial over-spend. More generally, there are problems with the public sector controlling such contracts, as we have seen historically. That is why London Underground and the Government believe that the sort of contracts that put pressure on the private sector to perform are much better and are in the interests of the public.

Lord Berkeley: My Lords, does the Minister recall—he probably does not because he was not in this place at the time—that the question from the noble Viscount, Lord Astor, about London Underground, was exactly the sort of question that we used to put to Conservative Members when they were trying to privatise Railtrack? The same comment was made about the disastrous cost over-runs that occurred. Does he agree that the best solution—this has been done in the rest of Europe for many years—is to hand over the metro systems to local authorities as soon as possible and let them and their politicians stand or fail by their records of service?

Lord Filkin: My Lords, as I am sure my noble friend knows, that is exactly what the Government are doing with London Underground.

Noble Lords: No!

Lord Filkin: My Lords, let me elucidate for the House. The Government are funding the PPP project to the scale of £8.1 billion over the next—

Noble Lords: Oh!

Lord Filkin: My Lords, the question will be answered if noble Lords would wait. We are funding the PPP project to the scale of £8.1 billion over the next eight years. That naturally involves a right to ensure that there is a sound basis for that investment. As soon as those contracts are let and all other clearances are given, London Underground, as part of London Transport, will be transferred to Transport for London, which is the responsibility of the Mayor and the Assembly. It will come directly under democratic, local authority control through the GLA and the Mayor.

Baroness Hamwee: My Lords, the Minister will be aware that one of the fears of London's government—I declare an interest as a Member of the London Assembly—and of London's taxpayers is that it will be found that London Underground has many liabilities that are unfunded and not disclosed. There is a concern that London Underground is not even aware of all of its liabilities. When did London Underground last conduct a detailed audit of its assets? Will the Minister assure the House that London Underground's risk register is up to date?

Lord Filkin: My Lords, London Underground has a reasonable understanding of its assets, but I do not believe that it has a comprehensive asset register of the depth that one would hope for in an ideal world. I believe that it has a good understanding of the major liabilities, as one would expect, given the amount of survey work that will have been done to let the scale of contracts that are now being let. Enormous contract sums are involved and will have required detailed surveying of the infrastructure.
	With regard to any future unforeseen eventualities—given life, one must be certain that they will arrive—clearly there will always be ongoing discussions between the Mayor, Transport for London and the Government, just as there are between other local authorities. But that is not to imply that there is an open door or a blank cheque. The Mayor has a responsibility to make those assets work well, to manage the substantial undertaking that Transport for London is taking on with London Underground, and to achieve value from those assets and from the massive capital investment that the Government have subsidised. We very much hope that he does that well because it will be to his credit and the credit of London if he succeeds in it. We believe that we have given him an enormous start.

Earl Ferrers: My Lords, can the noble Lord give an assurance that, as part of his responsibilities for looking after London Underground, the Mayor of London will not introduce traffic-calming arrangements on the Underground as he has done disastrously and inconveniently on the streets of London?

Lord Filkin: My Lords, what an interesting question. That is not in my brief. I believe that there will be traffic-calming in the sense of improved safety and automatic train protection, but I suspect that the noble Earl was not referring to that. We shall consider the matter further, and I shall even discuss it with him if I meet him.

National Health Service Reform and Health Care Professions Bill

Read a third time.

Baroness Northover: moved Amendment No. 1:
	After Clause 2, insert the following new clause—
	"DUTY OF PRIMARY CARE TRUSTS, NHS TRUSTS AND STRATEGIC HEALTH AUTHORITIES REGARDING EDUCATION, TRAINING AND RESEARCH
	Primary Care Trusts, NHS trusts and Strategic Health Authorities shall have a duty to safeguard and promote education, training and research."

Baroness Northover: My Lords, the arguments over this area of the Bill have been well rehearsed and cogently argued. That is, no doubt, why everyone is leaving the Chamber. I shall therefore be as brief as I can.
	We all agree that education, training and research are vital for the future of the NHS. The Government's plans to expand the number of doctors, nurses and other staff makes that even more important. We know that all is not well at present. On Report I highlighted the fact that Guy's, King's and St Thomas' schools of medicine are now shedding clinical teaching staff on a vast scale.
	However, this matter does not only concern medical schools—far from it. It concerns the whole of the health service. If it works effectively, devolution within the health service should produce a massive shift to local areas and their needs. Of course, much of that is to be welcomed.
	But national standards and national needs must also be addressed. We have expressed our concerns about that elsewhere in the Bill, and we shall return to the issue when looking at specialist commissioning. Clearly, giving a high priority to education, training and research is exactly one such area. It may not seem a pressing need at local level, given all the other competing claims, but it is what will underpin the future of the health service. We all agree on that.
	This debate turns on the difference between the words "may" and "must". We say that at all levels of the service, research, education and training must be supported. The Government seem to believe that "may" is enough. In Committee the Minister said that,
	"it is in the interests of the National Health Service and the Government to ensure that we address [those areas]",—[Official Report, 18/3/02; col. 1117.]
	Indeed!
	At Report stage, the Minister pointed out that,
	"primary care trusts are empowered to 'conduct, commission or assist in the conduct of research'",
	and that they can,
	"'make officers and facilities available in connection with training'".
	That is, they can, but they do not have to.
	The Minister said that he accepted that,
	"there is an issue [here] in regard to power and duty".
	That is, indeed, the point. He spoke of dedicated funding streams for teaching and research, adding,
	"I do not believe that primary care trusts will be under pressure to spend that money for other purposes".—[Official Report, 29/4/02; col. 507.]
	I trust that noble Lords will excuse my scepticism here. On Report I quoted a case where administrators had sought to redirect money from research and teaching into a black hole by the tactic of increasing the levy charged for allowing their premises to be used. There are ways and means of tapping into such money.
	I take another case in point. The Government announce increased expenditure on cancer. Does it reach the areas that it is supposed to reach? It does not—to the enormous frustration of patients and clinicians, as the Minister knows.
	The Minister is, and knows that he is, overly-optimistic if he believes that permitting the support of research and teaching, as opposed to ensuring such support, will be adequate. We know how much pressure there is on administrators to ensure each year that they achieve their various targets, not least financial ones. Education, training and research must not be squeezed out by such pressures.
	The amendment is very simple. It says that in the interests of the future of the health service and, therefore, of patients, trusts and strategic health authorities must have a duty to safeguard and promote education, training and research. I beg to move.

Baroness Noakes: My Lords, we on these Benches support Amendment No. 1. The issue of safeguarding and promoting education, training and research was debated thoroughly both in Committee and on Report. The noble Baroness, Lady Northover, has summarised the key concerns that were raised on all sides of the House. Those concerns were largely expressed in terms of medical education, training and research, but the amendment is rightly drawn in the widest possible terms and embraces all aspects of education, training and research relevant to the NHS.
	I do not believe that there is any disagreement in this House about the importance of education, training and research, or about the fact that there are currently problems in delivery. The disagreement focuses on how big that problem is and how well the existing structures of the NHS will allow education, training and research to thrive and prosper.
	At earlier stages of the Bill, the Minister referred to the powers that exist in NHS legislation. I do not believe that the existence of the powers has ever been suggested to be the issue. The issue is whether the powers are being used. That is why the amendment includes the word "duty". The Minister has never explained why he believes that there should not be a duty on the face of the legislation. He has rightly pointed out that what is important is what happens in practice, and we have heard many fine aspirations about teaching and research. I doubt that anyone in the NHS or, indeed, in your Lordships' House would not sign up to those aspirations.
	However, it is plain to all those involved that teaching and research in the NHS are vulnerable and threatened. In practice, the process simply does not work well enough. There is ample anecdotal evidence that teaching and research resources are squeezed at NHS trusts. For example, lecture rooms are used for other purposes; doctors are so overwhelmed by the day-to-day demands placed on them that little or no time remains available for research; and there is a staffing crisis at universities.
	The Minister has expressed considerable confidence that central earmarking of funds for teaching and research means that those funds are spent on those matters. But, as the noble Baroness, Lady Northover, said, many in the NHS do not believe that.
	It is tempting to think that the extra resources being put into the NHS as a result of the recent Budget will make the problem go away. Part of the problem has, indeed, been the squeeze on NHS finances. But I do not believe that it is as simple as that. It is far from clear that any extra resources will find their way into teaching and research.
	The heart of the question is whether all the bodies in the NHS with a role to play in education, training and research will, in fact, deliver. Many of us have doubts about PCTs, both in relation to their lack of preparedness for their responsibilities and their natural primary care orientation. Both those features mean that there can be no certainty that PCTs will commission in a way that promotes and safeguards education, training and research.
	I have already mentioned the concerns that exist at the level of NHS trusts. That leaves strategic health authorities. On Report the Minister told the House that there would be health and education sector partnerships at the level of strategic health authorities. In Committee, he laid stress on the role of strategic health authorities in performance managing PCTs if they do not achieve what those authorities believe that they should. One must have great faith in the efficacy of loose structures and untried processes to believe that that will solve the problem. It is clear to me that the responsibility of NHS bodies for education, training and research needs to be put beyond doubt. That is why we support the amendment.

Lord Walton of Detchant: My Lords, I have had the privilege of being involved in clinical practice in the NHS since its inception. For many years I was involved in teaching medical students and in clinical research. It is generally acknowledged that the standard of medical education in this country over all those years has been second to none. It is also generally acknowledged that clinical research, much of it conducted in the National Health Service, in the hospitals and in the community, has been responsible for enormous developments in patient care.
	The National Health Service Act 1946 included a requirement that teaching and research should be supported from the beginning. At the start of the health service there was a knock-for-knock agreement, by which it was agreed that clinical academics working in and employed by the universities should devote six half days a week of their time to clinical service and five half days in a week to teaching and research. The other part of that agreement required NHS staff, including consultants, to give teaching services to medical students and to other staff. Many years ago that agreement was eroded. Evidence from the heads of medical schools—the Council of Heads of Medical Schools—clearly indicates that many clinical academics are spending a minimum of 40 hours a week and some as much as 58 hours a week in clinical practice to the detriment of teaching and research.
	One outcome has been that many young clinical academics, due to a lack of research productivity, have not been able to persuade the research assessment exercise of the Higher Education Funding Council that they are involved as sufficiently in research as they should be, in order to improve the funding of their particular medical schools. The consequence has been that because of cuts in funding by the Higher Education Funding Council, a considerable number of clinical academic staff in two London medical schools will be made redundant. That is happening at a time when the Government are committed to increasing medical student numbers because of the massive shortage of doctors in the National Health Service. I therefore sympathise with and support the intention underlying the amendment.
	Another reason why I do so is that there is a shortage of recruits into clinical academic medicine. That is not surprising. There are 73 vacant chairs and almost 300 vacant clinical lectureships because the attractions of academic work and of teaching and research have been steadily eroded, often by pressures from managers in the NHS trying to compel members of staff to see more and more patients in order to reduce out-patients' and in-patients' waiting times and many other factors.
	The Minister has been kind enough to tell me that he has had discussions with the Council of Heads of Medical Schools. I agree with what has been said already, that there is a difference between a permissive power within an Act, which gives the right or the opportunity of health service bodies to support teaching and research and a requirement that they must do so. For the life of me, I cannot see why there can be any objection to an amendment of this nature being put on the face of the Bill. I hope that the Government will use its good offices, in consultation with the universities, and with the health service bodies, to make certain that the clinical practice of clinical academics will be reduced and that their time for teaching and research will be preserved. I support the amendment.

Baroness Cumberlege: My Lords, throughout its passage I have consistently tried to get the word "duty" on to the face of the Bill. I was delighted to hear the noble Lord, Lord Walton, say that the Minister has had talks with the heads of medical schools. I understand that the Minister may give noble Lords some words of comfort, which to some extent I welcome. Words of comfort can evaporate in the mists of time. We want the word "duty" to be incorporated into the Act so that there is a "must do", a requirement and so that there is no ambivalence.
	At Report stage I gave your Lordships an example of where I felt a duty was important. I mentioned my son, who had a penchant for motorbikes. He was very reluctant to use a crash helmet. In the language of the young, he felt that it was not cool. But a law was introduced, so as a parent, I had authority to say to my son, "You are not going on that motorbike without a crash helmet". What I did not tell your Lordships on that occasion was that about two months later the splendid East Sussex Ambulance Service scraped him off the road. I and the Ambulance Service have no doubt that the crash helmet saved his life, or at least saved serious brain damage.
	I am anxious to avoid serious brain damage for United Kingdom plc. Without a doubt, I agree that there is a crisis in academic chairs and young lectureships, as mentioned by the noble Lord, Lord Walton. I have heard others say that in this country we excel in the quantity and the quality of our medical research. The noble Lord said that he believed it was the best in the world; I have heard that it is the second best in the world because the United States is a little better than us. That is not surprising as the United States is very large and very rich.
	Not only do we excel in quantity and in quality, but we also excel in our cost-effectiveness. We are innovative. We are good at thinking up new ways of doing things. One has only to look at the Cochrane collaboration which is now being replicated all over the world. That is one man's vision and one man's inspiration. Sir Ian Chalmers conceived that and has firmly established it.
	I believe that we have real strength and more. Amazingly, we have so many opportunities: new opportunities in epidemiology, in tracking disease and in finding cures because we have a unique patient database that we can use. As primary care develops—I have much sympathy with what the Government are doing to try to strengthen primary care—we can build further on much of the research and, more importantly, on joint training in primary care and in the community. In the future, teamwork will deliver the services.
	We can also involve patients more directly in understanding science and research. In that context there is a mission. It is less threatening to understand a research project in which one is invited to take part when it is explained to one in the familiarity of a GP's surgery rather than in some remote, cold, clinical hospital. In this country we have a huge communications problem in promoting the public's understanding of science and research. For decades the Royal College of General Practitioners has promoted and encouraged research in general practice. When reading the BMJ it is encouraging to see how much of that journal is dedicated to publishing peer-reviewed research carried out by GPs and occasionally by nurses and other health professionals working in community medicine.
	That is a terrific picture. We really excel. Enormous achievements are being made, but I share the grave concerns of the noble Baroness, Lady Northover, and my noble friend Lady Noakes. Against the background of all that achievement, many of us fear that the enormous pressures now being exerted on primary care teams, GPs and other staff to meet targets will erode what we have achieved so far. I work intimately with primary care trusts at present, which is rewarding and interesting, but the pressures on them are huge. There are targets for waiting times in surgeries and referrals, national service frameworks, health improvement programmes, patient involvement, GP assessment, cancer plans and the need to balance the books, recruit staff and so on. Their agenda is enormous. I am sure that the Minister would agree that the new boards and professional executive committees will face a huge challenge.
	I am certain that research and training is not at the top of the list—it is going continually down the list as more pressures are placed on trusts to deliver. My noble friend Lady Noakes and the noble Lord, Lord Walton, talked about commissioning, so I shall not go into that, but I point out that primary care trust boards are not only commissioners but managers. They are in fear of a visit from the Commission for Health Improvement and are having to learn about all their new work as managers as well as commissioners. That is why they should also have a duty in respect of research and development.
	One of the great hallmarks of your Lordships' House has been its championing of research and scientific endeavour. I remind your Lordships that it was this House that in 1992 persuaded the government to introduce the post of Director of Research and Development in the Department of Health. That was strongly resisted at the time, but it was eventually conceded. That post, which was the result of an initiative from your Lordships' House, has made a marked difference to how the National Health Service now invests in and carries out research.
	I suggest that we hold to that which we know to be true, eschew the warm words of comfort that I suspect that we shall hear from the Minister and support this cross-party amendment with some of the same determination that the House exercised 10 years ago.

Baroness Carnegy of Lour: My Lords, I shall briefly amplify what my noble friend said. For several years, I was chairman of a medical research ethics committee. We considered about 350 research projects every year. Those projects took place in our area—we were attached to a teaching hospital and to a university—because so many GPs, hospitals and other NHS people were willing to take part in research. If hospitals or GP surgeries were not prepared to take part, much of that research could not take place. The Minister well knows that there must be a constant search for new drugs, which requires new trials over a wide area of the country. It is essential that GPs and hospitals at trust level are prepared to take part in those trials.
	Apart from that, the knowledge that research is taking place locally helps to recruit local people to take part in research as victims, as it were. That is important. It also makes for a lively NHS staff. Teaching and training must continue, even at cleaner level, but if research does not continue people are not aware that practices must be constantly updated—tried out, undertaken and established—in order to run a good show. There is no question but that that must be an obligation at trust level. I hope that the Minister will give in, because so far his response has been somewhat inadequate.

Baroness Emerton: My Lords, I, too, want to speak in favour of the amendment. If healthcare is to be effective and improved, we must promote and safeguard education, training and research not only in medicine but in so many other healthcare professions—in nursing, midwifery, physiotherapy and so on. That is why I welcome the breadth of the terms of the amendment.
	We must bear in mind that research in some of those professions started later than in medicine. I was associated with some of the first research into clinical nursing in the 1960s, which was sponsored by the Department of Health. We therefore have a much shorter history of research into nursing than has the medical profession. That is why I support the amendment with all my heart.

Baroness Finlay of Llandaff: My Lords, I rise not only to speak to the amendment but to explain the reason for the difference between its wording and that of Amendment No. 3, which stands in my name. The push for increased learning and the culture of learning across the NHS has been widely heralded as government policy. We have clearly heard the arguments why more resources need to go into education, training and research.
	Perhaps I may briefly illustrate that with an example from this morning in my hospital medical school. There were not enough tutorial rooms for one group of students to be taught, and 40 of them were trailing across the campus and looking for a room. The increased number of students coming through the system is putting an enormous pressure on teaching space. Sadly, the powers that are meant to be in place to ensure that their education and training is supported have not been implemented and have not kept pace.
	There is great concern that with the new private finance initiative bills for new hospitals, finance is not being set aside to ensure adequate teaching rooms. There should be tutorial rooms on wards so that the high standard of clinical training for which this country is renowned can continue, but making a room available and ensuring that it remains available costs money. In many hospitals around the country, a teaching room was set aside but has been taken over and not replaced because of the pressure for office space.
	The reason for the different wording of Amendment No. 3 is that the pattern of commissioning services in Wales will be different from that in England and it has not been finally decided whether there will be three health authorities. Hence the phrase,
	"those commissioning specialist services on behalf of the National Assembly for Wales".
	I understand from the Minister, Jane Hutt, that there will be three offices of the National Assembly for Wales—one in the North, one in the West and one in the South-East—which will take over many of the duties and commissioning obligations currently held by the health authorities which are in the process of being abolished. It is certain that not all of those responsibilities will be devolved to local health boards, because they are not ready to cope with complex commissioning. They will fall between the boards and the specialist commissioning body for Wales, which will deal with rare and highly specialised commissioning. So commissioning of services such as cancer services, which cut across all trusts, needs to occur at a level that is currently not clearly determined.
	Hence the different wording, but the amendments are compatible in spirit and in placing a duty on those at all levels—out in the community and in hospitals—to ensure that the high standards for which Britain has been renowned do not slip. Sadly, the Research Assessment Exercise demonstrated that over the years there has been slippage in academic surgery departments. The number of them that are world-class is declining, but those arguments have already been eloquently made by other noble Lords.

Lord Roberts of Conwy: My Lords, I support the amendments in the group, particularly Amendment No. 3, which applies the basic principles to Wales, where, as the noble Baroness, Lady Finlay of Llandaff, said, the organisation of the health service is to be somewhat different.
	As the noble Baroness, Lady Northover, said, we covered this ground in Committee. The Minister made great play of the fact that other NHS legislation gave permissive powers to promote education, training and research. As my noble friend Lord Howe said, those permissive powers do not amount to a duty. Your Lordships generally believe that such a duty should be imposed on the authorities named in the new clauses. The need for such a duty is particularly pressing, now that the Government have admitted that more frontline staff will be required, if their ambitions for the NHS are to have the slightest chance of being achieved.
	We are all aware of current staff vacancies in the medical schools. I have a report from the Council of Heads of Medical Schools that gives all the details. There are 73 unfilled professorial posts out of 1,042 full-time equivalents. There are 118 reader/senior lecturer vacancies out of 1,663 posts and 136 lecturer vacancies out of 844 posts. Those are fairly high percentages. The report says that the percentage of vacant posts is a cause for concern, especially in the context of the rapid expansion of medical education.
	I suspect that the report is somewhat dated by now. If anything, the situation has worsened, since the publication of the report, as the noble Lord, Lord Walton of Detchant, intimated. The need for training, education and research is more pressing than ever. There should be a duty on the authorities to promote them.

Lord Clement-Jones: My Lords, some powerful points have already been made, and I shall speak briefly in support of the amendment in my name and the names of my noble friend Lady Northover and others.
	The safeguarding of teaching, training and research at all levels is extremely important. The amendment is well designed to do that. One could go through the range of training, research and teaching, as several noble Lords have done in a cogent manner. For me, the tip of the iceberg was revealed in a report that appeared in The Times on Monday about redundancies at Guy's, King's and St Thomas's Hospitals. There have been reports about Imperial College and Queen Mary and Westfield College. I understand that further redundancies are on the way at Queen Mary and Westfield College. At a time when, as the noble Lord, Lord Walton of Detchant, said, we are meant to be increasing the number of places for medical students, such reports are symptomatic of the place of teaching and research in the Government's thinking—rather low down.
	Although the same system of research assessment takes place in Scotland, it does not have, as far as I am aware—I have been there for the past few days—the same problem as we do. In England—I stress England, although it may apply to Wales too—there is a problem with joined-up government. Once the research assessment has been carried out and grades given, a funding problem arises. I suspect also that medical research carried out by clinicians is not rated as highly for the purposes of the RAE as pure science research. That is also a symptom of the problem.
	It is a matter of enormous concern. We will not have the increase in the number of doctors that we need, unless we do things properly. This is a first step. Government action is needed, but a signal of this kind would go all the way through the NHS and would be extremely important.

Baroness Masham of Ilton: My Lords, at lunchtime today, one of your Lordships told me that he had to travel to South Africa every month to get treatment for leukaemia. The procedure is not undertaken in the UK. We are slipping behind in several areas of serious healthcare. In that case, the countries that can provide the treatment for the noble Lord's leukaemia are South Africa, the United States and Israel. Why is it not available in Britain? I support the amendment.

Lord Hunt of Kings Heath: My Lords, it has been an interesting debate. I agree with the noble Baroness, Lady Noakes, that there is no disagreement about the importance of teaching and research in the National Health Service. The argument is about the best way to ensure that the NHS gives appropriate support to teaching and research.
	Noble Lords kindly referred to the comments that I made at earlier stages of the Bill's progress. They will know that I am not convinced that the best way forward is to create a duty in the Bill, especially as the amendments do not define the words "education", "training" and "research". If the amendments were accepted, they would leave only a vague sense of what was required by NHS organisations. I must also repeat the point that I made at earlier stages, although I shall not repeat the various references to earlier legislation. Legislation already allows the Secretary of State to support teaching and research and to ensure that arrangements are made for such facilities—a subject raised by the noble Baroness, Lady Finlay of Llandaff—as he considers are reasonably required by any university for clinical teaching and research.
	Notwithstanding the legislation, the real issue—and the core of the argument—is how we ensure that the NHS takes those matters seriously. I accept that that is the challenge, particularly for primary care trusts. I had a meeting this week with the Council of Heads of Medical Schools that was, in the light of our earlier debates, most useful and constructive. I had a welcome opportunity to explore with the council ways in which we could ensure that primary care trusts provided the necessary support, by which I mean engaging patients and carers in support of teaching and research; fostering the special opportunities for research available in primary care; teaching the entire range of health profession students; and taking full account of teaching and research in their commissioning of local and more distant hospital and specialist services.
	I told the council that the Government expected that the primary care trusts would grasp the opportunity to ensure the long-term success of the NHS Plan and the continuing contribution of the NHS to health-related research and education. I accept the point made by the noble Baroness, Lady Cumberlege, about the extraordinary expansion of research capability among primary care workers and general practitioners.
	The Government have listened carefully to the arguments made by noble Lords at each stage of the Bill's passage. I am in no doubt about the need to modernise the arrangements for liaison and partnership between the health and education sectors, in order to address some of the issues raised. The noble Lord, Lord Clement-Jones, suggested that there was some defect in the arrangements for liaison between the Department of Health and the Department for Education and Skills. While I do not necessarily accept that is so, I agree that we need to streamline the liaison arrangements between the two Departments and other organisations in the education sector. Officials in my Department and the DFES are drawing up proposals to develop a new national framework to ensure joint working, to take forward the education, research and service agendas—and to obtain an overview of the inter-relationship between them. The role of primary care trusts will of course be part of that consideration and the Permanent Secretary at the Department of Health will play a leading role.
	Agreement has already been announced for a strategic alliance between my department and the Higher Education Funding Council for England. That alliance covers learning, teaching and research and builds on the earlier alliance between the Department and HEFCE on research issues. This is the ideal opportunity to pick up on some of the matters raised by your Lordships.
	The noble Baroness, Lady Carnegy, mentioned her work in regard to research ethic committees—and I agree with her points. This morning, in the Ministerial high-level strategic group that my Department and others, including the DTI, have with the research-based pharmaceutical industry, agreement was reached between the industry and the Government to institute work that will look specifically at how primary care trusts can contribute more effectively to clinical research.
	A number of points were made about clinical academics and that profession's relationship with the expansion in medical school places. The Department of Health and HEFCE have established a joint group to oversee the implementation of medical schools expansion. That group's membership will include the Chair of the General Medical Council's education committee. Part of the group's remit will be to monitor recruitment to posts needed to facilitate the expansion of medical students. It will identify other issues related to that expansion and recommend appropriate action. The group's first meeting is scheduled for tomorrow. Clinical academic staffing is a key issue on the agenda.
	The noble Baroness, Lady McFarlane, is right to suggest that we ought not to confine our remarks to medical teaching and research. I pay tribute to the noble Baroness's pioneering work in excellence in nursing research and teaching. My comments in terms of principles should be applied to the other health professions.
	It is good to welcome back the noble Lord, Lord Walton, to our debates. He specifically mentioned issues relating to clinical scientists. Last year, I was pleased to launch a new clinical scientists scheme—which came about as a result of long-standing concerns about clinical academic career prospects. A report by the Academy of Medical Science recommended extra clinical scientific posts and we were able to build on that recommendation.
	In additional to work at national level, I envisage local partnerships involving strategic health authorities, workforce development confederations, primary care trusts, NHS trusts, universities and other education establishments. Those partnerships will in the main be across the areas of strategic health authorities—which in any case have a strong performance management role in relation to PCTs and will be well able to pick up on issues of concern if they consider that the actions of PCTs are damaging the interests of teaching research in their strategic health authority areas.
	It is extremely important that one of the non-executive members for each strategic health authority will be from an institution within the higher education sector responsible for the delivery of pre-registration education in medicine, dentistry, pharmacy, nursing or other allied health professions. That will enable strategic health authorities to be clear about their responsibilities in relation to teaching and research. My experience of non-executives appointed from higher education institutes is that they are not backward at coming froward. I am sure that they will be encouraged to do so.
	The noble Baronesses, Lady Northover and Lady Noakes, were concerned that central funding for research, learning and development would not be spent appropriately at local level. All the funding is allocated directly to NHS providers, including primary care organisations. Funding streams are separately accounted for while other dedicated funding streams for teaching and learning—such as the PGEA and study leave for general practitioners—are also managed separately, to ensure their protection. Those arrangements secure the teaching and research funding protection that your Lordships rightfully sought.
	As to the amendments, PFI is a bit of a red herring. I invite the noble Baroness, Lady Finlay, to visit the Norwich and Norfolk NHS Trust, which only opened a few months ago. There is a new medical school across the road. The noble Baroness would see for herself that it is impossible within a PFI scheme to enhance teaching, research and clinical services.
	Amendment No. 3 would confer a general power on the Welsh Assembly to establish local health boards. As to my comments about teaching research, such matters are for the Welsh Assembly. It would be inappropriate to include specific limited examples in a general permissive power, as that would frustrate the whole purpose of establishing a national assembly. I assure the noble Baroness and others that I recognise the issues that have been raised.

Baroness Finlay of Llandaff: My Lords, it is not the intention to sabotage the role of the National Assembly for Wales. Its purpose is to ensure equal provision and that standards of educational facilities in Wales match those in England.

Lord Hunt of Kings Heath: My Lords, the noble Baroness should take up that matter with the Welsh Assembly. It is not an issue on which I, as a Department of Health Minister, can comment.
	I hope that I have convinced your Lordships that I regard education, training and research as extremely important. I so agree with the noble Lord, Lord Walton, that high-quality teaching of research is crucial. It is the bedrock of the NHS and of the superb professionalism of our staff. It goes wider. It is a critical factor in the success of the UK as a nation. I understand that your Lordships are concerned not to see any dissipation—and no one should doubt my determination to enhance our teaching and research capacity. The proposed new clause is superfluous. Key is vigorous action.
	Clear recognition of PCTs' responsibilities in teaching research, streamlining of the relationship between the Department of Health and the Department for Education and Skills, the strategic alliance between the Department and HEFCE, the initiation of work with the research-based pharmaceutical industry on PCT contribution to clinical research and the special group involving the Department and HEFCE to oversee the implementation of medical school expansion and pick up on points made about clinical academics is a powerful package of measures—one that will ensure that we enhance teaching research in this country.

Baroness Northover: My Lords, I thank the Minister for that reply and I thank noble Lords for their powerful contributions to the debate today and previously on the Bill. It seems as though the Government are taking some welcome measures, but it is a complex package with bits here and bits there. That underlines our belief that we need to have a duty on the face of the Bill.
	We continue to believe that support for research, education and training must placed on the face of the Bill and not be allowed to become actions which "can" take place rather than "must" take place. During the passage of the Bill there have been opportunities for that change to be made but it has not happened. I therefore do not feel reassured and I wish to test the opinion of the House.

On Question, Whether the said amendment (No. 1) shall be agreed to?
	Their Lordships divided: Contents, 131; Not-Contents, 108.

Resolved in the affirmative, and amendment agreed to accordingly.
	Clause 3 [Directions: distribution of functions]:

Lord Clement-Jones: moved Amendment No. 2:
	Page 4, line 9, at end insert "; or
	( ) are to be exercisable by the National Specialist Commissioning Advisory Group,"

Lord Clement-Jones: My Lords, I make no apology for coming back to the issue of specialised commissioning albeit, I hope, somewhat more briefly than in our discussions on Report, but I do so in order to obtain further and better particulars from the noble Lord, Lord Filkin, if he is responding. I am glad to see that he will. I recognise that the wording of the amendment may not provide the perfect vehicle for debate.
	On Report, the noble Lord, Lord Filkin, declared that the Government were adopting a pragmatic approach to commissioning for specialised services. That was welcome, as was the information given to the House that the Minister of State, Mr Hutton, had commissioned a review with the intention of issuing guidance in the autumn on arrangements relating to the period beyond 2002-03. However, the importance of the issue and the need for national and regional commissioning merits recognition in the Bill.
	In its last report in 1999-2000, the national specialist commissioning advisory group was asked to look at regional specialist commissioning. A new report must be somewhat overdue. It remarked that a common characteristic of these low volume services and treatment was that they were often of high cost requiring specialist technical expertise and a concentration of clinical care.
	Implementing new arrangements for such services was a key aim of the original White Paper, The New NHS: Modern, Dependable issued shortly after the Government came to power. It concluded that the internal market's fragmentation between multiple GP fundholders, as they then were, and health authorities had made it difficult to ensure properly co-ordinated commissioning arrangements for those services. A more systematic approach was needed if fair access was to be guaranteed and if clinical staff were to be supported in developing the most suitable and effective care. The new arrangements should be capable of commanding the confidence of clinical units concerned while being clearly accountable to health authorities and PCTs. I believe that those criteria are valid today. I do not believe that the Government's current vague expressions on the way in which those arrangements will be carried out meet those criteria.
	Let me take haemophilia as an example. Some 6,000 people are affected, costing about £115 million per annum to treat. Within this total, £20 million is spent on patients with inhibitors—that is, resistance to treatment with Factor VIII or IX as appropriate—principally in relation to the 100 or so with high titres. Immune tolerance treatment for such patients typically costs at least £1 million per patient. That is a high figure. Orthopaedic procedures, such as knee or hip replacements, are also very expensive as are major spontaneous bleeds.
	Currently, commissioning for haemophilia is arranged by health authorities or specialist consortia, not least to spread the risk of costly and largely unpredictable episodes affecting patients with inhibitors. These arrangements are by no means considered perfect and there is broad support for a national approach to commissioning. Conversely, delegation of responsibility to primary care trusts has been described by Dr Mark Winter, chairman of the Haemophilia Alliance which represents patients and clinicians, as "a catastrophe waiting to happen".
	I have taken one example of specialised commissioning and treatment. We must not assume that the problem will be solved if we delegate specialised commissioning to consortia of PCTs. We must consider those individual areas of specialised commissioning and decide what is appropriate for them, in particular whether national and regional commissioning are appropriate. We need clarity and accountability. We need to decide what is done at the appropriate level.
	In referring to regional commissioning one is in a sense referring to strategic health authorities in the context of the Bill—although I regret it—but clearly there needs to be expertise and reference at the strategic health authority level if we are satisfactorily to have the expertise to commission some of these services.
	The debate is perhaps a reprise but slightly more concrete in some respects. I hope that the Minister will be able to respond.

Baroness Noakes: My Lords, in moving the amendment, the noble Lord outlined why specialised services are a matter of great concern in the NHS. These Benches support the thrust of the amendment. It ensures that the commissioning of specialised services is done at the right level in the NHS. We believe that that is the correct direction although the amendment may not be in quite the right form.
	Highly developed skills for the commissioning of specialised services exist at regional level. I refer to the eight old regions, not the four virtual regions which are being created. The regional specialised commissioning groups ensure that patients have specialised services available to them and the providers of those services have the funding, security and stability which allows them to develop those services.
	Pure dogma has driven the Government to propose the break up of those regional groups and to devolve commissioning responsibility to PCTs. PCTs demonstrably do not have the confidence to handle specialised commissioning even if—and it is a big "if"—they have a commitment to specialised commissioning. Only a couple of weeks ago, the Joint Consultants Committee issued a press release saying that it is very worried about specialised commissioning given the lack of readiness of PCTs. This is not a problem that will go away despite the many assurances and expressions of confidence that we have had from the Front Bench opposite.
	Has the Minister ever heard of the management maxim, "If it ain't broke don't fix it"? No, the Government's approach is to break it first and then try to fix it. At a stroke the Government will smash the eight regional arrangements into 300 PCT-sized bits which do not work. They will then rearrange them into 28 strategic health authority-sized networks which might work if they are performance managed—but we have no evidence on which to be sure. If noble Lords have ever wondered what nonsense on stilts looks like, this is it.
	At Report stage the Minister gave us a glimmer of hope when he referred to the possibility that regional specialised commissioning groups will continue beyond 2002–03. He said that it may well be that they will not be dismantled. We were heartened to hear both that and the review proposed by Mr Hutton. Perhaps I may put a couple of questions to the Minister about Mr Hutton's review? Will he say a little more about it, who will be involved in the review and whether it will seek out the views of the National Specialist Commissioning Advisory Group of specialised service providers throughout the country and, importantly, the view of patients? Will he commit to making public the review and the evidence obtained for it?

Lord Filkin: My Lords, in my naivety I thought that on Report I had made everyone, if not totally content, substantially satisfied, about the queries. Clearly, I was premature on that.
	As we know, specialised services are those where patient numbers are small and quality can only be achieved by bringing together a critical mass of patients in each centre. This means that there will be relatively few centres offering treatment and there will not be a specialist centre in every local hospital. Therefore, PCTs acting in isolation could not deliver the quality and cost effectiveness which we all believe is essential for the future.
	However, under shifting the balance of power, primary care trusts are responsible for commissioning health services for their local populations. The noble Baroness, Lady Noakes, asked whether I had ever heard of the quotation, "If it ain't broke, don't fix it". Yes, indeed. What is "broke" is the current centralisation of the NHS, on the basis that all of its functions and products can be run on the old command and control model from Whitehall. That is why we believe it is right to establish PCTs, which are much better and more in touch and have a greater understanding of the needs of the public and patients and can take a wide and long view of how best to meet those needs. That is why we believe it fundamentally right to make sure that one did not half-bake devolution to them, but gave them full budgetary responsibility as far as it is practicable and sensible to do so.
	We believe that that is a much better approach—although it will require joint working between PCTs to deal with joint commissioning—than to have some rather arbitrary definition, inevitably by central government, about which functions should be dealt with at a different level from PCTs. The thrust of the Government's approach is to devolve, but to set very clear outcomes and standards to be achieved rather than to second guess the mechanisms in detail.
	However, I sought to signal in the last debate that we recognise the importance of getting it and the process of development and evolution right rather than suddenly throwing it all up in the air. PCTs both now and in the future will be expected to work together on a consortium basis to secure specialised services. That will certainly be true immediately and it is likely to be true for many functions for the future. In the short term they will be expected to honour existing agreements, financial and otherwise, negotiated by regional specialist commissioning groups. Those groups will continue for at least a further year with PCTs replacing the former health authority members. RSCGs have a specific role in developing PCT capacity to commission specialised services as part of a planned transition to successor arrangements. Ensuring that enough people with the right skills continue in their roles is particularly important in the context of specialised services.
	As I believe I indicated last time, there are already encouraging reports of PCTs working together to ensure that specialised services are effectively commissioned. Sometimes these consortia cover populations the size of a strategic health authority and sometime larger populations.
	As noble Lords have implied already from the slightly hesitant way in which they signalled that this was a probing amendment, the role of strategic health authorities will be to oversee the consortia arrangements with regional directors of health and social care, ensuring that specialised services are delivered properly across the whole region. Strategic health authorities are not there to commission services, as the amendment suggests.
	The amendment also refers to very highly specialised services which are vulnerable for some reason. They will continue to be centrally commissioned under the auspices of the National Specialist Commissioning Advisory Group. But such arrangements are only suitable for those very highly specialised services where there are a handful of providers and perhaps a couple of hundred patients across the whole country. This is not the case for most specialised services.
	I also indicated that while there is a clear national list now, that will change over time as technology changes. However, that is not to imply that we see a case for a rapid expansion in any way of the list of functions currently handled by the National Specialist Commissioning Advisory Group.
	The Government are adopting the pragmatic approach to commissioning and I believe that has been acknowledged. Current commissioning arrangements will be left alone where they are working well. The experience of PCTs, when they are essentially funding and supporting the new arrangements, will have to make a case both to each other and in practice to the SHA for any significant change to those commissioning arrangements. So it is not a carte blanche situation, being completely free to throw away good practice and common sense.
	We have considered further the valid points made by noble Lords during the passage of the Bill. I would like to add emphasis to the review headed by my right honourable friend, John Hutton, into specialised services and the commission arrangements, in particular for the regional-type services covered by several strategic health authorities, with a view to issuing guidance in the autumn on arrangements beyond 2002/3.
	The review will canvas views as to how best to integrate the current regional specialised commissioning group arrangements with the new health and social care regional boundaries in order to ensure that highly specialised services covering large geographic areas are properly planned, funded and monitored. It will be a wide review. We shall be interested to hear views from any organisation in the health service which has concerns, interests or issues relevant to the review's terms of reference. I emphasise that those views should be submitted.
	The noble Lord, Lord Clement-Jones, gave a specific example of haemophiliacs. He touched on a point which we did not go into in much detail on the last occasion concerning the consortia arrangements. While they are fundamentally concerned to deal with the need to commission over larger-scale populations, they are also a means of sharing risk so that there is no postcode lottery in the future. Therefore, any PCT which might, for example, have a sudden movement into its area of a number of people unfortunate enough to be really high-cost haemophiliacs, would not thereby have its budget skewed, damaged or put at risk other patients. That was a very legitimate concern raised by the noble Lord. That is why joint arrangements will also be put in place, not just for commissioning, but to pool risk.
	There is a good example already of a highly successful haemophiliac service commission consortium in south-east England covering over 80 PCTs and a population of 13 million, with financial risk-sharing arrangements. So I am not speaking just from theory, but from practice. Clearly, when one finds such examples one wants to ensure that they are assessed and the good practice is retailed to others, where appropriate.
	I hope that I can reassure noble Lords that the National Specialist Commissioning Advisory Group will continue doing its valuable work in relation to the very highly specialist services. But it is right that the primary care trusts should commission other specialist services under the careful scrutiny of strategic health authorities. PCTs will have the best knowledge of the needs of their population and are best placed to provide for their needs, in some cases in isolation, but in many cases working in firm consortia arrangements with others. For these reasons we resist the amendment as we believe that it is not necessary.

Lord Clement-Jones: My Lords, I thank the Minister for that reply. Quite clearly, from the Minister's reply I believe that further torture of him has produced results at Third Reading. I thank him in particular for the point he made about the pooling of risk in the way in which the consortia are constructed. There is a flaw, however. Only time will tell how matters work out in terms of the logic of some of the Government's proposals in this area. I refer to the blanket view that all centralisation is bad and that decentralisation is good for all purposes. That is the initial ground on which one stands.
	As a federalist, I have always believed that devolution is best done to the appropriate level. It is not always a question of saying that everything must be pushed down to the lowest possible level. The appropriate level is where the expertise and resources are best deployed. That is the problem that we shall have to address in the future.
	I accept the Minister's assurances about the ambit of Mr Hutton's review and in particular about the level of consultation that will be invited from all bodies in terms of the way in which the consultation is conducted. However, there is a lot more water to flow under the bridge. We very much hope—a hope shared by those on other Benches—that the regional groups will be retained as we believe that they fulfil a proper and useful function. We shall be looking at where the expertise properly resides; at the performance management and assessment carried out by the strategic health authorities; and in particular cases at whether or not a specialised piece of commissioning has been carried out at the appropriate level.
	For the moment, we are content to examine the Minister's reply and to hold him to account at a future date. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Finlay of Llandaff: moved Amendment No. 3:
	After Clause 6, insert the following new clause—
	"DUTY OF LOCAL HEALTH BOARDS AND NHS TRUSTS REGARDING EDUCATION, TRAINING AND RESEARCH IN WALES
	Local Health Boards and NHS trusts, and those commissioning specialist services on behalf of the National Assembly for Wales, shall have a duty to safeguard and promote education, training and research."

Baroness Finlay of Llandaff: My Lords, this amendment appears to be consequential on Amendment No. 1. Therefore, I assume that it will be accepted in principle by the Government. I beg to move.

Lord Hunt of Kings Heath: My Lords, I am advised that the practice of the House would be for the Government not to oppose the amendment. However, I should like to place on record the fact that I regard this—particularly in relation to a matter which I believe is for the Welsh Assembly—as a substantive and different matter from the issue of teaching and research.

On Question, amendment agreed to.
	Clause 14 [Commission for Health Improvement: constitution]:

Lord Hunt of Kings Heath: moved Amendment No. 4:
	Page 19, line 41, at end insert—
	"( ) After paragraph 5 there is inserted—
	"5A (1) The Secretary of State may direct a Special Health Authority to exercise—
	(a) his function of appointing the chairman and the other members referred to in paragraph 4(c), and
	(b) any functions conferred on him by regulations under paragraph 5 in relation to the appointment or tenure of office of the chairman and those other members.
	(2) The National Assembly for Wales may direct a Special Health Authority to exercise—
	(a) its function of appointing the member referred to in paragraph 4(b), and
	(b) any functions conferred on it by regulations under paragraph 5 in relation to the appointment or tenure of office of that member.
	(3) If the Secretary of State or the Assembly gives such directions, the 1977 Act has effect as if—
	(a) the directions were directions under section 16D of that Act, and, accordingly,
	(b) the functions were exercisable by the Special Health Authority under section 16D.""

Lord Hunt of Kings Heath: My Lords, in moving this amendment, I shall speak also to Amendment No. 26.
	Amendment No. 26 delivers the commitment that I made on Report that the NHS Appointments Commission will be responsible for appointing the chair of the Commission for Patient and Public Involvement in Health. But we go further—demonstrating that we are committed to the independence of the commission and distancing the appointments process from the Secretary of State. These amendments enable the Secretary of State to delegate to the NHS Appointments Commission such of his functions as may be appropriate in relation to the tenure of office, terms of appointment, dismissal and so on of the chair and members. The details of how such arrangements with the NHS Appointments Commission might work in practice are still subject to discussion with the chair of the commission and his team.
	We have also been persuaded that similar arrangements should be made for the appointment of the chair of the Commission for Health Improvement. The Secretary of State will now have the power to direct a special health authority to appoint the chair and members of the commission. This power will extend also to the Assembly and the appointment of its member.
	Dame Deirdre Hine has announced that she does not intend to seek reappointment. I should like to take this opportunity to place on record my gratitude and that of the Government for the key personal contribution that she has made to the development of the commission.
	Through Amendment No. 4, the next chair will be appointed by the independent NHS Appointments Commission. This anticipates arrangements to be made for the new health inspectorate, as was recently announced by the Secretary of State. Again, my right honourable friend will be able to delegate to the NHS Appointments Commission his decision-making powers in regulations relating to the appointment and tenure of office.
	I believe that these amendments follow the discussions that we had at previous stages. I very much hope that noble Lords will accept them. I beg to move.

Baroness Noakes: My Lords, we greatly appreciate the amendments that the Minister has brought forward in relation both to the CHI and to the Commission for Patient and Public Involvement in Health. We are glad that he has agreed with us.
	Perhaps I may ask the Minister one question. Why are the amendments phrased in terms of directing "a special health authority" to carry out the appointments and functions of the Secretary of State? Given the wording, that could be any special health authority—for example, it could be NICE or any other NHS body; I probably do not even know the current list of bodies which are special health authorities. Why does not the Bill simply mention the NHS Appointments Commission?

Lord Hunt of Kings Heath: My Lords, I can—

Lord Clement-Jones: My Lords, if the Minister wishes to respond at the end, that would seem to be convenient. Perhaps I may just insert my twopenny-worth into the proceedings.
	I welcome not only the amendments but also the assurances that the Minister gave. Otherwise, we should spend many happy hours debating "may" and "shall", as we have on other occasions. In particular, these are important for the independence of the CHI and the Commission for Patient and Public Involvement in Health. I suspect that the Minister may have set a precedent for discussion of future health Bills. But as an opening of the door to greater independence for these two bodies, this sets an excellent precedent and runs counter to previous legislation to quite a degree.
	I associate myself with the Minister's warm words about Dame Deirdre Hine. She has done a splendid job. There may have been a difference of approach in the way in which the CHI has been run in terms of its developmental role. However, the Minister has explained that on a previous occasion. I believe that a rather different role is envisaged for the CHI in future but that does not detract at all from the way in which it has been a resounding success in its first period.

Baroness Carnegy of Lour: My Lords, the word "direct" is used as opposed to "delegate". Does that mean that the direction cannot be revoked afterwards without primary legislation?

Lord Hunt of Kings Heath: No, my Lords. The Secretary of State has the power of direction, and I suppose that what he directs he may "un-direct".

Baroness Finlay of Llandaff: My Lords, perhaps I may put a brief question to the Minister. Subsection (2) states that,
	"The National Assembly for Wales may direct a Special Health Authority".
	I understood at an earlier stage of the Bill that the health authorities in Wales are to be called "health authorities", not "special health authorities". It is simply a matter for clarification. The intention of the amendments is most welcome.

Lord Hunt of Kings Heath: My Lords, my understanding in relation to the question asked by the noble Baroness, Lady Noakes, is that, clearly, the NHS Appointments Commission will do the appointing. But because the NHS Act itself does not provide for the National Health Service Appointments Commission we could not now place it on the face. It is a special health authority. When the Secretary of State makes a direction, clearly that responsibility will be given to the NHS Appointments Commission. But the appointments commission was set up by secondary legislation. That is why the amendment is termed in the way it is.

On Question, amendment agreed to.
	Clause 15 [Establishment of Patients' Forums]:

Earl Howe: moved Amendment No. 5:
	Page 21, line 17, at end insert "(including services provided by an independent hospital, independent clinic, independent medical agency, or care home under arrangements made by the NHS trust, Primary Care Trust or Care Trust for which a Patients' Forum is established)"

Earl Howe: My Lords, in moving this amendment, I shall speak also to Amendments Nos. 6 to 9 and 11 to 15.
	On Report, I suggested to the Government that if they intended to be consistent about patient and public involvement and give full recognition of the growing role of the private and voluntary sectors in delivering healthcare to NHS patients, there was one important way in which the arrangements in the Bill needed to be buttressed; namely, by ensuring that the functions of a patients forum could be extended to every location in which publicly funded care was delivered. It is no good to an NHS patient if he finds that having been moved to, say, a private care home to recuperate from an operation, he cannot then access the local patients forum if he needs to do so.
	Similarly, if the acute trust looking after our old friend, Mrs Archibald, decides to send her to a local private hospital to have her operation, why should she be suddenly cut off from the trust's patients forum? When considering the provision of mental health services of the significant proportion of NHS patients who are treated in the private sector, what is the argument against making sure that such patients in privately run treatment centres have exactly the same guarantee of representation as they would have in an NHS facility?
	I know that the Minister is sympathetic to that argument, but his main rejoinder last time was to say that the amendments were superfluous because when the NHS contracts with independent providers, the inspection rights of patients forums will be set out in the relevant contract. That is fine as long as the contract covers the issue. Experience of the past few years shows that it is sometimes very difficult to get health authorities to insert such arrangements into their contracts, despite departmental guidance to that effect. Even if we take it as read that visiting rights have been included in a particular contract, how can those rights be enforced? The patients forum itself will not be a party to the contract.
	I agree with what the Minister said on Report, namely, that with the NHS becoming a much larger purchaser of services within the private sector, the rights of inspection should feature more prominently and perhaps more automatically in contract negotiations. But, for the reasons that I have given, I do not think that that is good enough. As I said on Report, the Bill places very specific duties on patients forums. Clause 15(2)(a) states that they must
	"monitor and review the operation of services"
	and Clause 15(2)(b) states that they must
	"obtain the views of patients".
	Patients forums should not have to be dependent on the vagaries of a contract to fulfil those duties.
	The other matter covered by the amendments relates to overview and scrutiny committees, which ought to be able to scrutinise services delivered to NHS patients in whatever setting those patients are being looked after. The Minister helpfully said on Report that he would consider the issue. I understand his point that the remit of OSCs covers NHS bodies that may or may not agree contracts with the private sector. I am not sure that it is possible for an OSC to engage in the proper scrutiny of services unless it can call the provider of those services directly to account. That should be part and parcel of the deal that the private service provider enters into in exchange for accepting NHS patients.
	I hope that the Minister will be reasonably sympathetic to these probing amendments. I beg to move.

Lord Clement-Jones: My Lords, I strongly support the noble Earl, Lord Howe, on Amendments Nos. 5 to 9 and 11 to 15. To some extent, there is a sense of déjà vu about our debates. The Minister may recall that we had very similar debates when we discussed the inspection powers of CHI, which seems like a long time ago but was probably three or four years ago, during the passage of the Health Act 1999. At that time, we said that it was utterly logical for CHI, as the audit and inspection body being set up at the time, to cover not only NHS facilities but private facilities as well. The case is even stronger and more cogent now as services will be commissioned by the health service and not only private health care is involved.
	We know from the stated plans of the Secretary of State that it is intended that the NHS should have flexibility to commission the NHS internally or, as seems to be more and more likely, from the private sector, and even from overseas, so flexibility is being built into the system.
	The noble Earl, Lord Howe, made the case extremely well. He referred to the vagaries of contracts, and as a lawyer, I agree that that is absolutely true—indeed, more so than he can say. The contents of a contract depend on the bargaining power of the parties. If it is a distress purchase, commissioned by a health trust that has to buy care very quickly from a specialist provider, it will be in no position to insist on very much. It may have a degree of leverage on the price but I doubt that it will have much leverage on whether there should be powers of inspection for the patients forum. Leaving it to the parties to decide the contents of the contract sounds to me, as a lawyer, an extremely faulty way of going about things. The issue would be far better expressed in legislation.

Lord Rea: My Lords, my noble friend the Minister has given serious consideration to the amendments. The Secretary of State and the Prime Minister have said many times that the private sector will be brought in increasingly to provide services that were formerly provided by the National Health Service. It, therefore, seems completely logical that patients and citizens should be able to comment on such services through patients forums and scrutiny committees. If not, how will those services be monitored? Will withdrawal of the contract be the only discipline available? That is not desirable as the services will be integrated by then and will be difficult to replace. I shall be very interested to hear my noble friend's reply.

Baroness Masham of Ilton: My Lords, the noble Earl, Lord Howe, has explained very well the fragmentation that could complicate the life of patients when they are looked after in a variety of health establishments. The Minister knows the complications of hospital infections, which need all the monitoring they can get. That is only one example of the complications that could arise.

Lord Hunt of Kings Heath: My Lords, I have a great deal of sympathy with the intention behind the amendments, although I do not believe that they are necessary.
	NHS patients remain NHS patients wherever they are treated and there is no question that it is extremely important that patients forums can enter premises and inspect services. That is the Bill's intention. The difference is the legal basis that underpins the arrangements.
	First, I remind noble Lords that it is not necessary to list care trusts as a separate entity that must allow patients forums entry rights. Care trusts are either NHS trusts or primary care trusts that have been redesignated as care trusts under Section 45 of the Health and Social Care Act 2001. As such they are already provided for under the terms of Clause 17 of this Bill.
	Secondly, Clause 15(2) covers all services arranged by the trust, including those provided in independent clinics, hospitals, medical agencies or care homes, local authority care homes or directly by the NHS. Whenever NHS care is provided the service can be reviewed by patients forums as per Clause 15(2).
	Thirdly, NHS patients remain NHS patients wherever they are treated. As I said, it is important that patients forums are able to enter premises and inspect services. That has always been our intention. NHS bodies will be expected as a matter of course to set out rights for patients forums in the individual contacts that they agree with independent providers.
	Both the noble Earl, Lord Howe, and the noble Lord, Lord Clement-Jones, referred to contracts. I am aware that the details of such contracts have been a source of some concern to community health councils in the past. That is one of the reasons why we are currently discussing with the independent sector a set of standard terms and conditions for NHS bodies to use when drawing up contracts for acute hospital care. Naturally, in such standard terms and conditions we shall include appropriate provisions to safeguard the rights of patients forums. We shall stress the importance of those provisions in the accompanying guidance.
	In addition, we are considering whether the patients forums' non-executive director on the trust board should be given a specific responsibility for ensuring that contracts include details of the arrangements for patients forums to exercise their functions. We shall also consider whether they should monitor arrangements for forums to review, monitor, and inspect the services provided by the trust through arrangements with non-NHS providers.
	I acknowledge the concern to inspect nursing homes and other healthcare establishments under the Care Standards Act 2000 in order to ensure that they meet appropriate standards of care. As the National Care Standards Commission has taken over the regulation and inspection of the bodies specified in these amendments from local authorities and from health authorities, such inspection will enable the closest attention to be paid to those private sector providers.
	In addition, through the Commission for Patient and Public Involvement in Health, patients forums will be able to report matters of concern to the National Care Standards Commission, the Commission for Health Improvement, and any other body that they consider appropriate under Clause 20(6) of the Bill.
	As regards overview and scrutiny, I make it clear, again, that the definition of "health service" will, in any case, include services provided to NHS patients under arrangements made by a trust. It is irrelevant whether the service is provided by the trust, or under an arrangement made with an independent body. The patient remains an NHS patient, and the health aspect of the service received can be scrutinised by his or her local overview and scrutiny committee. Although the pathway is somewhat different because of the different legal basis of an NHS organisation and of an independent provider, I am satisfied that patients forums will have the ability to undertake inspections within the private sector where they are dealing with NHS patients.

Earl Howe: My Lords, I thank the Minister for that helpful reply. I am also grateful to those noble Lords who took part in this debate, not least the noble Lord, Lord Clement-Jones, who was right to point out that the bargaining power of the parties to contracts in this sort of instance will vary considerably case by case. Nevertheless, it is heartening to hear that the Government are considering the possibility of a standard form of words for such contracts. It is also helpful to know that they are thinking in terms of giving a specific role to the patients forum member sitting on the trust board to ensure that contracts do include suitable provisions.
	However, we return to the fundamental point; namely, that when it comes to enforcement of the contract, the patients forum is in rather a difficult position because it has no locus in that respect. I very much take on board what the Minister said about overview and scrutiny committees. Again, I found his response encouraging. I take it from his remarks that the overview and scrutiny committee will be able to look at the service actually delivered to the patient—the patient experience—wherever that service is delivered. Therefore, it will not need to confine itself to cross-questioning the trust that commissioned that service; it can question directly those who provided the service in the private facility, whether it be a hospital or a care home.

Lord Hunt of Kings Heath: My Lords, I should clarify the position. I believe that the overview and scrutiny committee would be in a position to invite a private sector provider to appear before it. Therefore, it would be for the private sector provider to decide whether or not to accept that invitation. What is not in doubt is the fact that the arrangements made by an NHS organisation for commissioning those services would be covered by the responsibility of the overview and scrutiny committee. In accordance with the legislation, the committee would be in a position to require a representative of that body to appear before it.

Earl Howe: My Lords, again, I thank the Minister for his most useful clarification.
	As regards the National Care Standards Commission, it would be reassuring to know that a line of communication will be established between the commission and the relevant patients forum. Although the Minister mentioned the likelihood of the National Care Standards Commission wishing to report to the Commission for Patient and Public Involvement in Health, or possibly even the CHI, there is perhaps another line of communication available in this case—namely, the relevant patients forum. I leave that thought with the Minister. We have had a most useful debate. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 6 to 9 not moved.]
	Clause 16 [Establishment of Patients' Councils]:

Earl Howe: moved Amendment No. 10:
	Page 22, line 4, leave out "from among"

Earl Howe: My Lords, this is a technical amendment to remedy a drafting defect that crept into the Bill on Report when the amendment introducing what is now Clause 16 was accepted. I beg to move.

On Question, amendment agreed to.
	Clause 17 [Entry and inspection of premises]:
	[Amendments Nos. 11 to 15 not moved.]
	Clause 19 [Supplementary]:

Earl Howe: moved Amendment No. 16:
	Page 25, line 17, after "Authority," insert "an overview and scrutiny committee or joint committee within the meaning of sections 7 (functions of overview and scrutiny committees), 8 (joint overview and scrutiny committees etc) and 10 (application to the City of London) of the Health and Social Care Act 2001 (c. 15),"

Earl Howe: My Lords, in moving this amendment, I shall speak also to Amendments Nos. 17, 18, 22 and 24. We debated these amendments on Report. They propose a duty of scrutiny for local authorities in substitution for the power of scrutiny conferred on them by the Health and Social Care Act 2001. This is an important issue. When confronted by a matter brought to their notice by a patients forum, my concern is that some local authorities may simply choose to ignore it and do nothing; either because they have other priorities, or because they do not have the necessary resources.
	As matters stand, there is nothing in this Bill or elsewhere to ensure that patients forums will be listened to; yet scrutiny of health issues by local authorities is absolutely central to patient and public representation. It is a function currently carried out by CHCs. If nobody has a statutory duty to scrutinise health issues, and, where necessary, take action, patients forums will simply be left talking to a brick wall. In fact, except in the context of minor matters that can be sorted out within the narrow confines of a trust, forums will almost cease to have a point.
	On Report, the noble Lord, Lord Filkin, argued that under the Local Government Act 2000 local authorities already have a "responsibility"—I use his word—to promote the economic, social and environmental well-being of their areas. He added:
	"It could not be clearer that they are responsible for promoting the health and well-being of their communities".—[Official Report, 30/4/02; col. 619.]
	On those grounds the noble Lord considered my amendment unnecessary.
	As the noble Lord is aware, I took his statement to mean, first, that local authorities already have a duty to promote the health and well-being of their communities; and, secondly, that the provisions of the Local Government Act are directly relevant to the scrutiny of health issues. I withdrew my amendment on that basis.
	Following the debate, the noble Lord was kind enough to write to me to correct my interpretation of his words. He said that when he had spoken of local authorities having a responsibility to promote the economic, social and environmental well-being of their areas, I should have understood him to mean that they had a power to do so. I do not think that I can be blamed completely for having interpreted the noble Lord's words as I did. However, that was a helpful clarification and I am grateful to him.
	The other part of the noble Lord's argument was also important. I have had an opportunity to examine the Local Government Act 2000. Section 2 contains the power that I have just mentioned, and Section 4 contains a duty for a local authority to prepare a strategy for promoting or improving the economic, social and environmental well-being of their area and contributing to the achievement of sustainable development in the United Kingdom. Perhaps two questions arise from that. First, given that health is not specifically mentioned in the Local Government Act at that point, can the Minister confirm that Ministers and the Department of Health have received legal advice that,
	"economic, social and environmental well-being"
	in the Local Government Act subsumes health?
	Secondly, can he confirm that the power contained in Section 2 of the Local Government Act should be interpreted as implying a power of scrutiny of health issues? If the answer to both those questions is yes, I would find that encouraging. If it is yes, can the Minister say whether the Government are prepared to issue guidance to local authorities to make that matter clear, and whether they could incorporate guidance about the content of the strategy mentioned in Section 4 of the Local Government Act to the effect that the strategy should cover health issues as well as all the rest?
	What the Minister was essentially saying on Report was that my amendments were unnecessary for the reasons I have given. He was also arguing that the amendments, in so far as they created a duty, were undesirable, on the grounds that it is wrong, as he saw it, to impose duties on democratically elected bodies such as local authorities. I have reflected on that argument. I am not sure what I think of it, really. It was clearly Parliament's intention when it passed the Health and Social Care Act 2001 that local authority overview and scrutiny committees should have the function of scrutinising matters relating to health. In other words, it was not in Parliament's mind that local authorities should pay lip service to the function or that they should fail to perform it at all if they did not feel like it. The whole point of setting up overview and scrutiny committees was to ensure that the scrutiny function currently performed by CHCs should be safeguarded.
	I believe that we should ensure that the edifice of patient and public involvement really does stand up, which is why I am proposing this amendment. In other spheres, the Government have not been averse to imposing duties on local government—witness for a start Section 4 of the Local Government Act. In a matter as important as this, I really see no reason why there should not be such a duty in order to ensure that what the Government themselves say they want really does happen. I beg to move.

Lord Clement-Jones: My Lords, I rise to give partial support to this group of amendments. In particular, I think that Amendment No. 16 has quite a lot to commend it in terms of seeking to ensure that overview and scrutiny committees are added to the list of bodies to which patients forums will provide information. We on these Benches believe that it will be essential for overview and scrutiny committees to receive information from patients forums in order to inform their scrutiny role. Patients forums will have useful information about the performance of individual NHS trusts and their patients' experience. We are not so convinced about the changing of a power to a duty, but the position is somewhat complicated by the Minister's previous statements about the duty already being contained in legislation. Indeed, I suspect that the LGA is in some confusion as to whether it is a duty or a power.
	Our nervousness about the possibility of turning the power into a duty is based on whether the additional resources would be made available. We believe that local government is making efforts to ensure that there is effective overview and scrutiny. However, it is early days yet. We believe that there will be an opportunity in future health Bills—we are quite sure that the House will be considering a number of health Bills before too long—to tweak the legislation to ensure that, if local government is falling down in overview and scrutiny, we can rectify the matter. Nevertheless, there is nervousness about whether resources will be available if that power is turned into a duty.
	We therefore offer partial support for Amendment No. 16. We also rather regret the way in which the groupings have been made, particularly as regards Amendment No. 24. We are therefore prepared to accept Amendment No. 16, but not the other amendments in this group.

Lord Filkin: My Lords, I shall speak first to government Amendment No. 22.
	As I have previously stated, we are committed to ensuring a robust framework representing the public's concerns to government where there is inadequate consultation over major changes and where there are concerns over the merits of proposals for change. Our lawyers have confirmed that there could be some ambiguity in the provisions in the Local Government Act, as amended by the Health and Social Care Act 2001, about OSCs and their ability to refer matters to the Secretary of State for Health. In case any local authority was uncertain about whether it has the power to stick a stamp on an envelope and send its views to the Secretary of State, we think it appropriate to remove that doubt by amending the relevant provisions of the Health and Social Care Act. Amendment No. 22 does just that.
	Amendment No. 22 makes it explicit that OSCs may make reports and recommendations to "the relevant authority"—the Secretary of State, in relation to England—thereby ensuring the referral framework that we think is necessary. The detail for referrals will be prescribed in regulations as is the case with the current arrangements for community health councils. I hope the House will agree that this amendment is an important one and that it is right to ensure that there is no doubt about this fundamental element of the PPI system. For OSCs to be truly powerful in delivering local accountability, they need to have the power to trigger action at Secretary of State-level if necessary. I am sure that they will do so.
	I turn to Amendment No. 24. I have on a number of occasions made it clear that we think that it is not right to compel local authority overview and scrutiny committees to scrutinise health services through a statutory duty. Not only would that be completely out of kilter with the existing role of OSCs in other areas, but, more importantly and more critically, it is wrong to compel a democratically elected independent body to do something in this particular circumstance. I think that the implication of the amendment is that noble Lords have some doubts as to whether councillors would carry out one of their key roles—that of local accountability. However, the health of the population will be a key concern for overview and scrutiny committees and their constituents as decisions affecting people's health have a direct impact on the well-being of the people who elected them. As elected representatives, they will be keen to be seen to be addressing issues that matter to their electorate. If they do not, one would expect them to suffer the consequences.
	For this reason, the decision whether to scrutinise the NHS must rest with local people and their representatives. Given the diversity of Britain, the breadth of health issues, and the fact that judgments will have to be made about authorities, simply imposing a duty—which is what I think the noble Earl, Lord Howe, wishes, and I respect his reasons for advocating it—would leave open massive issues about which matters the OSCs should examine at any given time. Each year they would have to decide where scrutiny was most needed. In practice, no one can do everything all at once.
	I turn to some of the legal issues raised by the noble Earl, Lord Howe. I believe that I referred to both a "role" and a "responsibility". I also grant that it was not at all foolish to infer that that implied a duty rather than a power. Under Section 2 of the Local Government Act 2000, the local authority has a power to do anything it considers likely to achieve the promotion or improvement of the social, economic or environmental well-being of its area. Section 4 goes further and says that the local authority must prepare a strategy for promoting or improving the economic, social and environmental well-being of its area. There is nothing to prescribe what a local authority must consider in developing the strategy under Section 4. However, in practice and in almost all circumstances, it will develop the strategy in collaboration with others. I am sure that that has been the thrust of government advice to local authorities and to PCTs. It is therefore reasonable to expect that this will involve local authorities in considering health matters.
	The noble Earl, Lord Howe, asked about government advice to local authorities on preparing the strategies. Off the cuff I cannot recollect that. I am certain that such advice has already been given. Whether it includes advice explicitly about liaison with the health service I do not know but we shall check that. In any event, were it not to do so, it is a point that we would consider for future issues of such guidance.
	The Local Government Act 2000 goes further. Section 21(2) gives overview and scrutiny committees a broad advisory role in relation to functions of the whole authority and matters affecting the locality. OSCs have the power to review, scrutinise and make reports and recommendations in relation to matters set out in Section 21(2). By virtue of Section 7 of the Health and Social Care Act 2001, the power of the OSC includes a power to review, scrutinise and make reports and recommendations on matters relating to health.
	The noble Lord also referred to concerns about implementation. We are currently halfway through a national consultation on the policy framework. Draft regulations and guidance will be prepared during the summer. We shall consult on those around September. It is envisaged that the new provisions will come into force in late 2002 with a full training and implementation programme to assist the roll-out. CHCs in particular are to be involved in the development of the implementation plan.
	With regard to the view of local government, the noble Lord, Lord Clement-Jones, may have mentioned this matter previously but the LGA, in briefing it circulated when the Bill was in Committee, recognised the need for OSCs to carry out health scrutiny—which I hope gives some comfort to the noble Earl, Lord Howe—but did not want this power to be a duty. I believe that I signalled that issues of resources would form part of the discussions and negotiations between the LGA and central government in terms of the level of expenditure and grant that would be considered appropriate in future.
	I refer to the dalliance of the noble Lord, Lord Clement-Jones, with Amendment No. 16, with regard to whether OSCs should have a duty to give information to patients forums. One hopes that they will so behave. However, if we are resistant to imposing a duty of the type that the noble Earl, Lord Howe, suggests, the logic is that we would also resist imposing a duty on them with regard to giving information to patients forums. That measure will occur in practice if local government and the health service promote it vigorously and learn from experience and try to learn from good practice in local authorities that do that well. That is what needs to happen. I do not think that changing the words in the Bill would make a fundamental difference to that. For those reasons, we resist Amendments Nos. 16, 17 and 18 while standing four square with the noble Lord and the noble Earl as regards the importance of making sure that local government seizes this significant role and tries to ensure that it is carried out to the benefit of the public.

Earl Howe: My Lords, the noble Lord is always courteous and helpful in his responses and I am grateful to him on this occasion as on others. He made two comments that I considered particularly helpful. First, he referred to Section 21 of the Local Government Act 2000. I understood him to say that that section contains a power to scrutinise health services. I was not aware of that and it is a helpful clarification. Secondly, the noble Lord helpfully referred to guidance to local authorities. I am grateful for his undertaking to look again at what guidance has been issued.
	I am sorry obviously that my arguments have not won the day. The argument with regard to imposing duties on local authorities is perhaps a stronger one than the noble Lord would have us think. It is interesting that the Greater London Authority Act 1999 has a provision at Section 34 to impose a duty on the GLA to exercise all its powers in a way best calculated to promote the health of Londoners. I am not sure why there is thought to be such a difference of principle as regards this Bill and as regards a general duty for local authorities. However, we have made progress on that issue. I am grateful for the noble Lord's comments.
	I welcome government Amendment No. 22. It comes rather at the eleventh hour, but better late than never. I shall have more to say about that amendment later in today's proceedings. I am disappointed that it is framed in the way that it is as I think that it could be stronger. It seems to me that it is not the same to say that a local authority can make reports to the Secretary of State as to say that it has a right of referral. A right of referral is a much more robust and clearer arrangement. The matter remains a little wishy-washy. I accept gratefully what has been offered—I certainly do not object to what the Government propose—but I shall return to the matter later. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 17 and 18 not moved.]
	Clause 20 [The Commission for Patient and Public Involvement in Health]:

Earl Howe: moved Amendment No. 19:
	Page 26, line 15, after "bodies" insert "or persons"

Earl Howe: My Lords, at Report stage the noble Lord, Lord Clement-Jones, tabled an amendment the purpose of which was to broaden the functions of the Commission for Patient and Public Involvement in Health by giving it the unfettered role of representing the interests of patients and the wider community. It was an important amendment which went to a Division and was defeated. I have not sought to bring back those particular issues at Third Reading. I have instead tabled Amendments Nos. 19 and 20 which are narrower in scope. Specifically they are designed to extend the matters upon which the commission is permitted to make representations and to widen the audience, as it were, of those to whom it is allowed to speak.
	We can see in subsection (2)(a) of Clause 20 that the commission has the function of,
	"advising the Secretary of State, and such bodies as may be prescribed, about arrangements for public involvement in, and consultation on, matters relating to the health service in England".
	In other words, the commission's functions are all about process. The rest of the clause continues in that vein. What the commission does not appear to be about is the experiences of real patients or the configuration of health services. That, for me, is a missed trick. At the moment CHCs and their national body, ACHCEW, can carry out a wide variety of activities. They can brief the press about hospital closures or policy changes affecting the health service. Another thing they can do is brief Members of both Houses of Parliament about issues relating to patient representation. It is no secret that ACHCEW has briefed me for this Bill and has done so very well. If the Government are serious about having a national body which is there to support the empowerment of patients—and that is what the commission is supposed to be about—surely to goodness it has to be allowed to do more than just comment to the Secretary of State about the arrangements in place to deliver that empowerment. This whole exercise should not just be about structures and processes; it should be about what matters to patients, and the commission should be allowed to speak out publicly on any matter if it wishes to.
	The scope of these amendments is much more restricted than the one that was defeated at Report stage. I am not now proposing an unfettered power because the amendments would in fact allow the Secretary of State to decide exactly how the commission should operate. But when it comes to the matters where the commission has a legal standing, I do think that we need to progress beyond the scope of subsection (2) and the relatively narrow set of issues detailed in subsection (6)—the safety and welfare of patients. We need a body that can speak out on matters that bear upon the health service more generally. Again, I think of exercises such as Casualty Watch or speaking out on a particular PFI project. Why should it not be allowed to do such things? The danger, as the noble Lord, Lord Clement-Jones, said on Report, is that once the commission's permitted activities are set in stone in the Bill, any attempt to stray beyond them will technically be ultra vires. We should build in an element of flexibility.
	I hope that the Minister will treat these amendments more kindly than the amendment that we debated on Report. They are intended to be helpful. I beg to move.

Lord Clement-Jones: My Lords, like the noble Earl, Lord Howe, I regret the fact that the amendment tabled on Report was not agreed to. I assure the Minister that these amendments are not the previous amendments in a different guise. They are much more limited in their extent and would, as the noble Earl explained, simply widen the subject matter on which the commission can make representations.
	Without the amendment, as the noble Earl explained, the commission would be restricted to making representations about the arrangements for patient and public involvement, as opposed to the issues that really affect people's health and health services. In view of the information that the commission will be amassing, it would be a waste to have such a body if it was not able to make representations to the Secretary of State and others on the issues that really matter. That would leave patients and the public effectively without a voice on health services at national level.
	As the noble Earl explained, ACHEW is currently able to draw on the information, experience and expertise of CHCs and its own research to inform what it says or asks for—indeed, campaigns for—at the national level. Recent examples include: changes in investment in accident and emergency services, which was a result of its regular "casualty watch" survey; debates on charging for NHS services, which were stimulated by its recent report, A tax on illness; and the representations that it is currently making on patient confidentiality.
	The amendments would allow the commission to take up such issues at the national level; it would otherwise be prohibited from doing that. It should be noted, however, as the noble Earl pointed out, that the commission will still be restricted to making representations to bodies and persons who are prescribed by the Secretary of State. If the Minister would state which bodies and persons he envisages the Secretary of State prescribing, we should all find that extremely useful. We are keen to ensure that the commission can make representations to the media, politicians and so on if it feels that that is appropriate.

Baroness Masham of Ilton: My Lords, I want to ask one question, which I have asked on several occasions but to which I have not received an answer. Is there going to be a body that can put forward people's views on the closure of hospitals? CHCs have been able to do that.

Lord Hunt of Kings Heath: My Lords, I must apologise to the noble Baroness, Lady Masham; I thought that I had answered that question on several occasions. The role of the CHC in relation to significant changes of services is being transferred from appointed bodies—the CHCs—to democratic local government. The overview and scrutiny committee of the principal local authority in an area, which is democratically elected, will deal with those issues. It will have the right to call in officers of NHS bodies to examine them. If there is disagreement on a proposal, that can be referred to a national body, the Independent Reconfiguration Panel, which will advise the Secretary of State. Far from dissipating the current mechanism, we have strengthened it by linking it to locally elected councils.
	I accept that the amendments are worded differently from those that we debated on Report. However, they cover much the same ground. The noble Earl, Lord Howe, and the noble Lord, Lord Clement-Jones, clearly hark for some national body to focus on representing what might be the views of patients. The noble Earl referred to their attempts to speak out. That misreads the whole purpose of the commission.
	Subsection (2)(a) clearly states that it will advise the Secretary of State,
	"and such bodies as may be prescribed, about arrangements for public involvement in, and consultation on, matters relating to the health service in England".
	The principal aim in that regard is to ensure that we get patient and public involvement right. I do not believe that the public interest would best be served if such a commission allowed itself to go down the track of having a representative role, which we know cannot be carried out by such an appointed body. That is why I resisted the amendments on Report.
	The noble Earl, Lord Howe, underestimated the commission's functions. He described that as involving a rather process-oriented set of roles. Paragraphs (a) to (h) in Clause 20(2) contain a very powerful set of responsibilities, which will ensure that we get public and patient involvement right. I draw his attention in particular to paragraph (d), which refers to,
	"providing assistance to Patients' Forums and Patients' Councils, and facilitating the co-ordination of their activities".
	The commission has the potential to help local patients' forums by pulling together their activities, which will enable patients' forums to work together. When a number of patients' forums wish to come together over various issues, the commission will help and enhance that process. That is a much better approach. It involves using experience at the local level—helping patients' forums to come together to express views on patients' experience and thinking rather than seeking at a national level to carry out a role that I do not believe such bodies can be expected to carry out effectively.
	I point out to the noble Earl that Clause 20(3) gives the commission the function of promoting,
	"the involvement of members of the public in England in consultations or processes".
	The arrangement is not focused solely at prescribed bodies. The commission has a much wider role—to examine the way in which individuals' involvement in the National Health Service can be enhanced and developed. It is much better for the commission to focus on helping to ensure that we get effective public involvement rather than being side-tracked by attempting to have a representational role that I do not believe it could carry out effectively.

Earl Howe: My Lords, I am grateful to the Minister, although I am disappointed by what he said. I took great care to frame the amendments in such a way that they did not replicate the amendment that was defeated on Report. It would not have been proper to raise the same issues.
	The whole point of these amendments is to give the Secretary of State the option of broadening the functions of the commission—the areas of activity in which it can engage. I do not belittle the functions listed in Clause 20(2). Broadly speaking, the commission is an enabler, which will assist patients' forums and communicate with the Secretary of State. I understand that that is a very important role. But for whom will it speak? I do not believe that it will speak for patients. That is the source of my disappointment. It will speak for the bodies, structures and processes that represent patients, which is at one remove from the coal face.
	I understand the Minister's reluctance at this point to confer on the commission what he termed "a representative role". Again, I say that I took care not to be prescriptive in these amendments. If they were accepted, it would be entirely up to the Secretary of State to determine the extent to which the commission should widen the scope of its activities. The noble Lord, Lord Clement-Jones, listed a number of subject areas which I considered to be very relevant in that context.
	I wanted to stand here with a clear conscience in speaking to the amendments and to convey to the House that I believed they were substantively different from the amendments that we debated and rejected on Report. I believe that I can do so. For that reason, I feel that I can take the opinion of the House.

On Question, Whether the said amendment (No. 19) shall be agreed to?
	Their Lordships divided: Contents, 100; Not-Contents, 104.

Resolved in the negative, and amendment disagreed to accordingly.
	[Amendment No. 20 not moved]

Earl Howe: moved Amendment No. 21:
	Page 26, line 45, leave out "Primary Care Trusts" and insert "Overview and Scrutiny Committees".

Earl Howe: My Lords, this is a very straightforward amendment. It is, in a real sense, consequential upon the amendments carried on Report in relation to patients councils. In line with those amendments, I believe that it makes sense for the Commission for Patient and Public Involvement in Health to operate with reference to the boundaries of local authorities which have overview and scrutiny committees.
	That will not always be possible, but if the object is for the commission to provide support to OSCs for their scrutiny function, then it must be desirable for the commission to operate on all fours with patients councils, with which it will be intimately bound up. Clearly, in an area where there is, for example, a large county overview and scrutiny committee, there may be a need, following local discussion, to operate with reference to a smaller area. My amendment allows for that. I beg to move.

Lord Hunt of Kings Heath: My Lords, I am not entirely convinced that now is the right time to debate this issue. My understanding of the amendment passed on Report establishing patients' councils was that the intention was that the councils would take over the functions of the commission at the local level. In Clause 16(4)(a) it is made clear that it will be the function of the patients' council to,
	"facilitate the co-ordination of the activities of member Patients' Forums including by the provision of staff and services to Patients' Forums".
	I am not clear why the noble Earl thought it important to debate this issue at this stage. I believe that an important element of the Government's proposal is that wherever possible the focus of patient involvement should be at the local level. Surely that means, as far as the health service is concerned, that it will be most appropriately placed in the primary care trust area.
	I suspect that the other place will have something to say about patients' councils and your Lordships may be able to debate this matter again fairly shortly. Perhaps we should return to this debate at that time.

Earl Howe: My Lords, I am sorry that the Minister feels that way. If we are to have patients' councils, as I hope, it no longer makes sense for the commission to operate within the relatively narrow purview of a PCT. The Minister said that his understanding was that the patients' councils would take over the functions of the CPPI. I do not completely hold with his choice of words. The commission will still have a role. Effectively, it will act as the secretariat to patients' councils, an extremely important role. Nevertheless, de facto I believe that if we have patients' councils the commission will have to operate by reference to overview and scrutiny committees because that is the way in which patients' councils, by and large, will be configured. I am sorry that the Minister does not feel that he can accept the amendment. In the circumstances I shall not press it. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Hunt of Kings Heath: moved Amendment No. 22:
	After Clause 20, insert the following new clause—
	"OVERVIEW AND SCRUTINY COMMITTEES
	In section 7 of the Health and Social Care Act 2001 (c. 15) (health-related functions of overview and scrutiny committees), in subsection (3)(b), at the end there is inserted "or to the relevant authority"."
	On Question, amendment agreed to.

Earl Howe: moved Amendment No. 23:
	After Clause 20, insert the following new clause—
	"REFERRAL OF CONSULTATION ARRANGEMENTS AND DISPUTED DECISIONS
	(1) In section 11(2) of the Health and Social Care Act 2001 (c. 15) (public involvement and consultation) paragraph (a) is omitted and there is inserted—
	"(a) The Secretary of State.
	(aa) Care Trusts".
	(2) Before an establishment order for a Strategic Health Authority, an NHS Trust, a Primary Care Trust or a Care Trust is made, varied or revoked the Secretary of State shall consult those bodies in subsection (5) whose districts are wholly or partly within the area of operation of the relevant authority or trust.
	(3) Any Strategic Health Authority considering whether to exercise its powers under section 17A of the 1977 Act (health authority directions: distribution of functions) shall first consult the bodies provided for in subsection (5) whose districts are wholly or partly within the area of operation of the relevant Primary Care Trust.
	(4) The Secretary of State shall by regulations make provision—
	(a) concerning the application of section 11 of the Health and Social Care Act 2001 such that if in the view of any of the bodies in subsection (5) consultation arrangements are inadequate, the body in question shall refer the matter to him,
	(b) for the referral to Strategic Health Authorities of disputed decisions concerning substantial variations or developments in the planning or operation of health services by bodies detailed at subsection (5),
	(c) for circumstances in which bodies detailed at subsection (5) shall refer decisions concerning the planning or operation of the health service to him including the circumstances in which referrals shall be made directly to him by Patients' Forums and Patients' Councils on the failure of overview and scrutiny committees to respond to a referral made to them under section 19(2)(m) of this Act, and
	(d) placing a duty on him and those bodies receiving referrals to respond to them with a specified time limit and giving reasons for any decision taken in relation to the subject matter of the referral.
	(5) Those bodies referred to at subsections (2) to (4) are—
	(a) overview and scrutiny committees or joint overview and scrutiny committees provided for in sections 7 (functions of overview and scrutiny committees), 8 (joint overview and scrutiny committees etc) and 10 (application to the City of London) of the Health and Social Care Act 2001,
	(b) Patients' Councils,
	(c) Patients' Forums."

Earl Howe: My Lords, the arrangements for patient and public involvement concern one matter and one matter alone: accountability. There are two strands to the way in which accountability works, depending on whereabouts in the hierarchy of responsibility action is initiated. Action is initiated either at the top, in which case there has to be consultation at national and at strategic level with local communities, or it is initiated at local level. At local level there are often powers to trigger action at a national level. In those cases there needs to be a right of referral upwards from local communities to national and strategic level.
	This amendment, which has been debated on earlier occasions, seeks to preserve those lines of accountability to ensure that national accountability for what happens locally is not compromised. The advent of strategic health authorities, as branch offices of the NHS, means that they must be built into the mechanisms as well. On many occasions the Government have said that overview and scrutiny committees will have rights of referral as robust as those held by CHCs. With great respect to the Minister, at the moment that is not the situation. As I have indicated on previous occasions, the right of referral between local communities and the national government is absent from the Bill and from the Health and Social Care Act. That omission needs to be rectified.
	I am delighted that the Minister has tabled Amendment No. 22. That amendment will give overview and scrutiny committees an explicit power to make reports and recommendations to the Secretary of State. However, I do not believe that that amendment is an adequate substitute for the one that we are now debating. I am seeking a robust replacement for the referral powers of CHCs, which is a much wider and a more significant matter. The government amendment gives only a permissive power to overview and scrutiny committees to make referrals. The wording of the relevant part of my amendment stipulates that referring such matters should be mandatory. That wording replicates the wording of the regulations that cover CHC referrals. It is a significant point and there is a significant difference.
	We can all too easily imagine a situation where an OSC may be aware of flawed plans or flawed consultations about an important change to the provision of services, yet choose not to refer them, perhaps—dare I say—for political reasons. I touched upon that point at the previous stage of the Bill. To put it mildly, that would not be a satisfactory state of affairs. The word "referral" carries the implication, to my mind, of a two-way dialogue. My amendment puts a statutory responsibility on the Secretary of State to provide a full and timely reply to whatever may be referred to him. That is how proper accountability should work. Making reports and recommendations, as under the government amendment, does not imply that a response is required in the same way as a referral does.
	On the face of the Bill we already have a right of referral by patients' forums to overview and scrutiny committees. If we compare that right with the terms of Amendment No. 22 we can see that it is more robust than the referral mechanism—if I can call it that—from local to national level. I ask why that should be.
	Subsection (4) is an attempt to achieve those aims. It also requires the Secretary of State and care trusts to consult. That is especially relevant to specialised commissioning, where currently only the hotch-potch of PCTs will consult. Also, if a Secretary of State ever proposed to abolish a strategic health authority, it would be unreasonable for it to be expected to consult on its own demise. The Secretary of State ought to do that. That illustrates that it is not just health services that can trigger consultation, as the Minister implied earlier. I include care trusts again, not withstanding the Minister's reply last time, because it is far from clear whether a care trust would consider a duty to consult as applying to it once it was established as a new body. It is better to place the matter beyond doubt.
	The amendment also requires consultation by strategic health authorities with local communities about the transfer of functions to PCTs. That would be important, for example, where a PCT was not ready to take on such functions and the local community wanted a say in the matter. Last time, the Minister said that the provision in subsection (3) of the new clause was unnecessary, but without it PCTs may be given a completely different remit from the one for which they were established without any consultation. That would be entirely unacceptable.
	Last time, the Minister said that he thought that the amendment would overcomplicate the Bill. I hope that I have shown that that is not so and that there are good reasons for every ingredient in it. I beg to move.

Lord Clement-Jones: My Lords, I support Amendment No. 23, moved by the noble Earl, Lord Howe. We welcome government Amendment No. 22 so far as it goes but, like the noble Earl, we believe that it does not go far enough. We make the same distinction as did the noble Earl between reports and referrals, referrals being a much more active process requiring a reply from the body to which the referral has been made.
	The noble Earl, Lord Howe, put a gloss on the Minister's reply on Report. I shall not repeat the points that he made about care trusts, but he did not put a gloss on some of the Minister's other replies, which it may be helpful for me to take the Minister through. First, care trusts should be specified because there is doubt about whether they are included.
	Secondly, the Minister said of subsection (1) of the new clause that it would be only "cosmetic" to include the Secretary of State under the duty to consult because of shifting the balance of power, and so on and so forth. The reason for including the Secretary of State is so that he is forced to put in place appropriate arrangements for consultation on specialised or regional services. The noble Lord, Lord Filkin, did not deal with that angle. For example, as the noble Earl, Lord Howe, said, it would be unrealistic to expect a strategic health authority to consult on its own demise if that was proposed by the Secretary of State. That is a strong point that I re-emphasise.
	The Minister said that subsection (2) was covered by the government amendment relating to consultation orders for strategic health authorities. He will note that subsection (2) of this new clause goes considerably wider. The noble Earl, Lord Howe, touched on subsection (3). I shall not repeat what he said.
	On Report, the Minister said of subsection (4) and the issue of OSCs not having the right to refer:
	"We are considering how best to provide for this within the framework of Section 7 of the Health and Social Care Act".
	We have dealt with that today, but I hope that it will become clearer. After all, the Minister and his colleague, Hazel Blears, have been considering that since the beginning of the Bill's passage. The Minister said that,
	"we shall be able to guarantee that a secure referral mechanism exists within our provisions".—[Official Report, 30/4/02; col.636]
	We welcome Amendment No. 22 on that basis.
	The Minister summarised Section 11 of the Health and Social Care Act 2001 as providing for people's views and concerns to be "fed into decisions". That is quite different from consultation on substantive issues.
	So the Minister did not deal adequately with the points that I and the noble Earl, Lord Howe, raised. Several aspects of the new clause would be hugely beneficial to the Bill and I hope that he will take the time and trouble to respond to all of them.

Lord Filkin: My Lords, as noble Lords have recognised, we dealt with one of the issues that the amendment attempts to address under Amendment No. 22. I hope that that does not raise too high an expectation of further concessions.
	Our amendment gives OSCs an explicit power to refer matters of concern to the Secretary of State—as we said, to put the matter beyond doubt—and subsection (4) of the new clause is intended to strengthen the mechanism for getting the views of OSCs, among others, to the Secretary of State. However, there is no benefit in making the further changes suggested in subsection (4). In fact, to do so would overcomplicate and muddle the arrangements. I shall seek to explain why.
	Amendment No. 22 did not deal with the other aspects of Amendment No. 23—namely, the changes to the duty on the NHS to make arrangements to consult and involve the public in its decisions. Again, the amendment is unnecessary. It is unnecessary to include care trusts because, as we have said several times, PCTs and NHS trusts are already listed and care trusts will be either PCTs or NHS trusts. They cannot be anything other than one of those two, so they are already explicitly caught and provided for in the way in which the noble Earl, Lord Howe, wants. They will already be covered by the references to PCTs and NHS trusts.
	Secondly, with regard to the Secretary of State, shifting the balance of power to the front line means that responsibility for the planning development and delivery of services is now with the front line. It would be inconsistent then to place a duty on the Secretary of State when the duty is already in place for local bodies—those bodies with responsibility for the services and the relationship with local people to be able to carry out the involvement and consultation activity.
	Section 11 of the Health and Social Care Act 2001, which was referred to, already places a duty on NHS bodies, including strategic health authorities, to consult on services for which they are responsible. Including the Secretary of State under that duty makes only a cosmetic difference.
	Subsection (2) of the new clause relates to the Secretary of State consulting bodies representing local patients on the establishment orders of NHS bodies. As noble Lords will know, we have already amended the Bill to cover the consultation of relevant bodies on the establishment orders of strategic health authorities. Subsection (3), which places a duty on strategic health authorities to consult before directing PCTs to undertake their statutory duties surely gives rise to major consultation overload. We would be in danger of so much consultation as to make the process meaningless.
	Although we recognise that the new clause attempts to clarify and rationalise the consultation arrangements, it goes far too far in its detail and perhaps muddles the arrangements already provided for.
	The noble Earl, Lord Howe, spoke about how important it was that overview and scrutiny committees acted with vigour and argued that referrals should be mandatory. I find it hard to believe that the major local authorities—the 150 social services authorities, which are some of the most powerful local authorities in the land—would be inhibited about referring matters to the Secretary of State or elsewhere, if they felt that there was something wrong with healthcare provision or facilities in their area.
	The noble Earl made a more substantial point about anxieties that local authorities might, at times, behave in a party political way that might inhibit the vigour of their response. There is no black-and-white answer to that problem. Even if we created a duty to refer, it would not necessarily be meaningful; people can refer things without putting much power into it. The local authorities will have noticed what happened in the case of Kidderminster Hospital and are more alert to the importance of taking seriously the concerns of the local public about health provision and do not think that they can behave along rather crude party lines. I am not necessarily implying that that was what Bromsgrove District Council did in that case.
	There has been previous reference to overview and scrutiny committees and how they will develop. The general advice, as I recollect it, was that they should not be whipped. They should give fairly full representation to all political parties, and they will have failed if they fulfil their duties in the kind of party political or partisan way about which the noble Earl was concerned.
	The question of whether strategic health authorities would consult about changes in PCT functions was mentioned. There will be no duty of consultation, as such, on the delegation of functions. However, if the shift of functions affects the development of the service and the way in which it is developed, the public will be consulted, under Section 11 of the Health and Social Care Act 2001. I hope that that gives noble Lords sufficient comfort.
	For those reasons—reinforced by what we said today—we believe that there is no need for the amendment. It should not be pressed.

Earl Howe: My Lords, I thank the Minister for his response. He repeated many of the arguments deployed last time and said, in particular, that the amendment would give rise to consultation overload. I do not see things in the same light. Consultation is an integral part of the quality agenda. It is integral to proper accountability in the system, which, to their credit, the Government say that they want to achieve.
	The overall trend in the Bill and in the Health and Social Care Act 2001 is to make the arrangements for consultation a good deal fuzzier. With CHCs, we have a clear, discernible process; what we are being given is more of a focus-group approach. I am not saying that focus groups do not have their merits. They are—or can be—useful devices. However, if legal duties to consult are lost and if the power of local communities to act against poor consultation or bad decisions is lost, the whole process will be reduced from a power to act to a power merely to talk. That is the background to the amendment. It is not superfluous.
	The Minister said that paragraph (2) of the amendment was covered by the government amendment agreed to previously that relates to consultation orders for strategic health authorities. However, that paragraph of my amendment includes NHS trusts, PCTs and care trusts, which are, otherwise, missed out. It also provides for consultations on variations and revocations, not simply establishments. I do not share the Minister's view that it merely replicates the measures that have already been put in place.
	In view of the hour, however, I shall not press the matter. The point has been made, and I do not feel that I can say any more. I thank noble Lords who contributed to the debate, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 24 not moved.]
	Clause 27 [Complaints about regulatory bodies]:

Baroness Finlay of Llandaff: moved Amendment No. 25:
	Leave out Clause 27.

Baroness Finlay of Llandaff: My Lords, the amendment refers specifically to the clause relating to complaints against regulatory bodies. When the clause was last debated, the Minister pointed out the importance of allowing members of the public to press for an explanation of delays, when they have made a complaint against a healthcare professional. The noble Lord, Lord Turnberg, warned against a system that automatically allowed every complaint to come to the council if the complainant was dissatisfied.
	The complaints procedures laid out here cause me great anxiety. Each regulator must have an appeals system in place and be able to receive complaints against the way in which it has conducted its business. Within its internal complaints procedure, the regulator must have a system for resolving such complaints. If the complaints are major, the body should—must—have a procedure for external review of its procedures. However, the internal complaints procedure should allow a complainant to return if he feels that his complaint has not been adequately heard or processed. There is no dispute that there must be a system that allows people to come back.
	The data on such complaints will be contained in the annual report of the regulatory body. If the procedures are not conducted adequately, it will be evident from the report, as will the fact that the standards set for the complaints procedure are not being adhered to. There is now provision for the council to direct a regulator to alter its code of practice through the affirmative resolution procedure. That has already been debated.
	If the complainant is not satisfied that the regulator has listened adequately to the complaint about the processes of that regulator, it would be appropriate for the complainant to go then to the health service ombudsman. I am concerned that, if the complaints procedure is internal to the council, the council will receive an inordinate number of complaints that should be dealt with by the individual regulator. It will undermine the council's ability to be an overarching body that can ensure that there is equity in complaints procedures.
	My other concerns relate to the fact that there will be different patterns of healthcare delivery in different parts of the United Kingdom. The regulation of healthcare professionals is a reserved power: so it should be. There may be a situation in which a decision is made about a complaint against a healthcare professional acting in a certain way in one part of the United Kingdom, such as Scotland or Northern Ireland, that could, at face value, set a precedent. It could be that a similar-seeming complaint made in England could be treated in the same way, although, in fact, it should be interpreted differently when the relevant regulatory body consider the minutiae of the issue. Decisions are often similar on the surface but turn out to be fundamentally different. Another problem is that under Clause 27(3) and (4), the council will act as a court—over and above the regulators. The noble Baroness, Lady Noakes, previously alluded to a difficulty in relation to the delicate issues surrounding confidentiality and disclosure. I beg to move.

Baroness Noakes: My Lords, the noble Baroness raised some important points, with which I sympathise. Clause 27 is something of a Cinderella. We did not discuss amendments to it in Committee because we came to it at the end of the fourth day in Committee and it was getting very late. Also, it was practically the last clause to be discussed on Report. I am not clear that we have discussed all the important issues that arise from the clause.
	Clause 27 gives wide powers to the Secretary of State to establish complaints procedures—many of which can override the provisions of the regulated bodies. I refer in particular to Clause 27(2)(g), which allows the Secretary of State to specify what happens in relation to the important area of confidentiality.
	On Report, the Minister said that the Government's decision was that Parliament should decide on important and sensitive issues. It is not that simple. Admittedly an order made under the clause will be by the affirmative procedure, but we know that your Lordships' House and another place can do little to orders. We have no ability to amend, so are left with the possibility of rejecting the whole order—which is often taking a sledgehammer to crack a nut.
	The Secretary of State will be the decision maker, which adds to Clause 27 being unsatisfactory, with worrying implications—particularly in relation to important matters that are properly dealt with by the regulatory bodies but which could be overridden. We do not know how the powers will be used. The Explanatory Notes are silent and the Minister has said nothing—certainly not in your Lordships' House—about the Government's intentions. Will the Minister say how and when the Government intend to use the powers in Clause 27? What consultation will there be before those powers are used—and what role does he expect the professional bodies to play in the development of a further tier to the complaints procedure?

Lord Hunt of Kings Heath: My Lords, I am not in a position to give a timetable for which such regulations might be brought before Parliament, but of course there would be full consultation. The regulatory bodies themselves will no doubt play an important role in putting forward their own views.
	Clause 27 is one of a number of clauses that develop the theme of the careful balance that we have attempted to strike between the benefits of self-regulation, the role of the regulatory bodies and the overriding public interest. The changes made as the Bill has progressed through both Houses have achieved that balance—which is why the regulatory bodies have expressed satisfaction with the outcome of discussions.
	Clause 27 is not to be seen as a means of overturning decisions of fitness-to-practice committees but as a power to investigate maladministration. The noble Baroness suggested that the ombudsman should have a role in relation to the regulatory bodies—but they are not subject to any ombudsmen because they are not government bodies. Our debates would suggest that none of us wishes them ever to be seen as government bodies. If an ombudsman cannot be involved, there is a persuasive argument for the council to carry out that function in relation to maladministration.
	While I hold the regulatory bodies in the highest regard, one cannot say that all of them have uniformly been particularly efficient in conducting their own disciplinary cases. In the past, some complainants have been the subjected to long waits, have had little idea about the progress of their cases and have received little information about the process as a whole.
	The regulatory bodies themselves recognise those problems and are working hard to put them right— but a backstop is needed, to permit another body to investigate where there is evidence of maladministration. Clause 27 provides that ability. Regulations for its operation would have to be brought before your Lordships' House and be subject to the affirmative resolution procedure, which will provide sufficient safeguards.

Baroness Noakes: My Lords, would the Secretary of State only trigger the powers in Clause 27 if there was evidence of maladministration among the regulatory bodies?

Lord Hunt of Kings Heath: No, my Lords—I would not say that at all. It is clear that we will wish to establish a scheme and produce the necessary regulations in due course.

Baroness Finlay of Llandaff: My Lords, I am grateful to the Minister for going some way to providing reassurance in respect of the questions asked by the noble Baroness, Lady Noakes. I am slightly concerned that the Minister has left the matter so open. I am glad that the concept of maladministration will be the underpinning principle by which Clause 27 could be invoked. There is certainly a need for some form of backstop to protect the public. The Minister is correct when he says that delays in processing complaints cause undue tension and distress. While there are still some gaps left, I am grateful for the Minister's reassurance that there will be limits on the way that Clause 27 is used. I beg leave to withdraw to amendment.

Amendment, by leave, withdrawn.
	Schedule 6 [The Commission for Patient and Public Involvement in Health]:

Lord Hunt of Kings Heath: moved Amendment No. 26:
	Page 87, line 33, at end insert—
	"5A (1) The Secretary of State may direct a Special Health Authority to exercise—
	(a) his function of appointing the chairman under paragraph 3, and
	(b) any functions conferred on him by regulations made under paragraph 4 in relation to the appointment or the tenure of office of the chairman and the other members.
	(2) If he does so, the 1977 Act has effect as if—
	(a) the directions were directions of the Secretary of State under section 16D of that Act, and, accordingly,
	(b) the functions were exercisable by the Special Health Authority under section 16D."
	On Question, amendment agreed to.

Lord Hunt of Kings Heath: My Lords, I beg to move that the Bill do now pass.
	Moved, That the Bill do now pass.—(Lord Hunt of Kings Heath.)
	On Question, Bill passed, and returned to the Commons with amendments.

Mobile Telephones (Re-programming) Bill  [HL]

Lord Rooker: My Lords, I beg to move that this Bill be now read a second time. It is a short and technical Bill, but it seeks to tackle a fast-growing problem; the theft of mobile phones.
	Tackling mobile phone theft is a key to driving down street crime. There is no doubt that the theft of mobile phones is a significant and genuine problem. The Home Office research report, Mobile Phone Theft, published in January 2002 showed that mobile phone theft is fuelling the rise in street robbery. For example, in 2000-01, mobile phones were stolen in 28 per cent of all robberies, compared with 8 per cent three years previously.
	In the Metropolitan Police area alone, the percentage of offences where a mobile phone is among the items stolen has risen from 25 per cent in 1999-2000 to 50 per cent in 2001-02. The Home Office has been working with the mobile phone network providers to address the problem of mobile phone theft. We set up a steering group with the police and the industry in January last year to develop an action plan of practical measures.
	Significant progress has been made. The Mobile Industry Crime Action Forum, two members of which I met today, agreed earlier this year to share information about stolen handsets. We have encouraged mobile phone operators and retailers to promote security information on their websites and manufacturers to give greater prominence to security advice in their manuals. And we have now issued more than 2 million of the crime prevention leaflets advising on measures to take to avoid mobile phone theft.
	I now turn to the specific issue that is addressed by the Bill. We announced in February that by the end of the summer all of the five main network providers will have in place the technology to disable a phone across all networks once it has been reported as stolen.
	Mobile phones can be disabled through a serial number on each handset, known as the International Mobile Equipment Identity number—the IMEI number. That is a 15-digit number which is programmed into the handset and is also visible on the body of the handset. The number appears on the records of network providers each time the phone is used. Phones reported as stolen will be barred from further use by reference to that number.
	Barring the handsets in that way should act as a strong deterrent to the thieves, preventing them from being able to use the phones that they steal. And if they cannot be used, they cannot be sold on—there is no market.
	However, barring a handset is not effective if the IMEI number is changed. Changing the number makes it impossible for the operators to track and disable it. At present, it is relatively cheap and easy to change the IMEI number of a mobile phone by using software to reprogramme the handset. Such software is freely available. Indeed, it may be bought or downloaded from the Internet. The police, for example, have seen a promotional leaflet offering for sale a kit which will change an IMEI number in five seconds. The kit costs £145. If the number is changed, a stolen phone reprogrammed in that way can then be sold on the black market.
	Existing international security standards state that the IMEI number should not be changed and that it should be resistant to change. We are encouraging the manufacturers to do more to achieve this, but the present position is that numbers can be changed.
	Perhaps I may give a further example to indicate the extent of the problem. BT Cellnet, which is now 0-2, estimated in July 2001 that there were potentially 1.5 million phones on that particular network whose IMEI number had been changed from their manufactured number. The Metropolitan Police and the mobile phone industry found that of a sample of 300 stolen phones only 10 per cent were being re-used with their original IMEI numbers. They concluded that the remaining 90 per cent were either disposed of or, as seems more likely, being reprogrammed. Furthermore—and this is the nub of the reason for the Bill—it is not currently illegal to reprogramme a phone in this way. That is the situation which this narrow and technical Bill seeks to address.
	In February, the Government indicated their intention to outlaw the activity at the earliest opportunity as part of the wider package of measures and actions we are developing to help tackle the problem of mobile phone robbery. In the meantime, we are continuing to press manufacturers to stop the problem at source by making it more difficult to change the identity of a handset.
	Perhaps I may give the House a further example. Apparently, the most duplicated IMEI number on the BT Cellnet records had been copied no fewer than 9,495 times at the time the information was provided to me. Two days later when it was checked again, a further 18 versions of that number were on the system. There is therefore no question that there is a big industry out there.
	I turn to what the Bill will do. It will create a new criminal offence of unauthorised reprogramming of mobile phone handsets. Specifically, it will be an offence to change or interfere with the operation of a phone's unique identifier; that is, the IMEI number. It will also create linked offences of possessing, supplying or offering to supply equipment for that purpose. It will be an offence to be in possession of equipment with the intention of unauthorised reprogramming.
	There will be occasions when the manufacturers of a mobile phone will need to change the IMEI number. No offence will be committed if the change is made by manufacturers or with their written consent.
	The new either-way offences of changing or interfering with the equipment identifier of the mobile phones without authorisation and possessing or supplying the equipment for that purpose will carry a maximum penalty on indictment of five years' imprisonment, or an unlimited fine, or both. In the magistrates' court, an offender may be punished with six months' imprisonment or a fine of up to £5,000 or both. The offence will be an arrestable offence under the provisions of the Police and Criminal Evidence Act 1984.
	I accept that the penalties, in particular for what appears to be a non-violent offence, look severe and we make no bones about that. The courts are cracking down on street robbers and those who fuel their activity, and they must expect to be dealt with harshly. Street crime is a problem and we are determined to deal with it.
	The creation of the new offences will close the existing loophole and send out a strong signal that Parliament is not prepared to tolerate the activities of those who seek to derive financial benefit from preying on their fellow citizens and abusing the lawful and profitable trade of mobile phones in this way. The mobile phone industry, the police and, I understand, all political parties are behind the initiative.
	I fully accept—although I make no promises—that there may not be a large number of prosecutions for the new offences. The legislation will help the police target and catch those involved in the reprogramming of mobile phones. With a telephone number being copied so many times, as in the example I gave, there is obviously an industry out there—one might say a cottage industry but a very big one. We do not believe that any legitimate business will be affected by the Bill. We have established with the industry that there is no legitimate reason for any individual to be involved in reprogramming a mobile phone.
	We are determined to do everything we can to stop the theft of mobile phones, which is doing much to fuel robbery and the general fear of crime on our streets. The Bill will close a gap in the law. It does not deal with everything but it is highly targeted. I fully admit that in introducing a Bill beyond the middle of May and hoping that it will become law before the Summer Recess we must be very modest in our intentions; otherwise, Parliament rightly would not stand for it. We have a serious problem on our hands and this is a narrow Bill to deal with a narrow issue—I accept that it does not deal with all the issues relating to the mobile phone industry. In any event, the Bill is not being introduced in isolation because many other issues relating to street crime are being taken forward in a number of other wider initiatives.
	I commend the Bill to the House.
	Moved, That the Bill be now read a second time.—(Lord Rooker.)

Lord Dholakia: My Lords, I thank the Minister for offering that explanation of why the Bill is necessary. He was right to point out some of the Home Office research into this matter.
	No one can be in doubt that we need legislation to curb such criminal activities. However, we need to distinguish between those who steal phones because they are somebody's possession and they do not have one, as against the organised criminals who find that mobile phones are easy to dispose of because there is a market here and abroad and such equipment can easily be converted into currency.
	There is an ugly side to such criminal activities which no civilised society can tolerate. In January, we saw headlines in our paper about a mobile phone thief who was jailed for four years with a dire warning that such a sentence would act as a deterrent.
	The judgment of the noble and learned Lord, Lord Woolf, the Lord Chief Justice, goes beyond the theft of mobile phones. It is about mugging, violent attacks and the bullying of victims. Of course it is questionable whether prison sentences for young people are effective in preventing such crime. We know that imprisonment does little to provide a deterrent. However, we cannot ignore the fact that according to the British Crime Survey about 470,000 mobile phones were stolen in incidents involving householders in 2000. The figure is an underestimation since the research does not cover commercial targets or incidents involving those under 16.
	This must be a worrying trend. It causes a large blip in our crime figures. The fear of crime must never be underestimated. We must add to that factor violence against victims. We know little as to how much of the activity is geared towards converting phone thefts into currency to satisfy a drug culture.
	It is for all those reasons that we need legislation to ensure public safety, reduction of this high level of crime and punishment for those who perpetrate such crime. The Bill, therefore, has our broad support.
	There are, of course, areas of concern. Children aged between 11 and 15 years account for over half the annual 1 million victims estimated by the police. The Bill does little to address that issue because we are dealing only with legislation which creates a number of offences relating to the electronic identifiers of mobile wireless communication devices and those young people of 11 to 15 years will hardly feature in that category.
	It would be impossible to identify how many young people between 11 and 15 years are involved in the process that leads to re-programming of the equipment. I suspect that, like most street crimes, it is more for personal benefit rather than through organised criminal activity that phones are stolen from and by that age group. It would be wrong, therefore, to build up expectations that the legislation would have any effect in that regard but that does not mean that it is not necessary.
	We are dealing with the two ugly sides of phone thefts. In the youth offending pattern we need to ensure that there are adequate sentencing guidelines which will deal with the matter in the context of street crimes taking into account the aggravating factor if violence is involved.
	Equally, the mobile telephone industry needs to develop a role of public education. I met with the representatives of the Mobile Industry Crime Action Forum and was impressed with the action it is taking. It has created an industry group to address the problems. I understand that there is an agreed equipment identity register. It has undertaken member activity to bring increased awareness of safety issues. It also has a close liaison with the Government and the police on measures to combat this type of crime.
	The forum supports the Government's Bill. It will curb the activities of individuals and organised gangs on reprogramming stolen devices, which criminals do with impunity. But there should be a warning for the mobile phone industry as well. In the present days of technological advancement it must invest enough resources to ensure that technology is available to demobilise any stolen property. That cannot be beyond the means of science today. It would be nice to hear what the industry is doing about it.
	I do not believe that we should delay this legislation unnecessarily. However, it would be helpful to know the following. Is there any legislation in European Union countries on similar lines to ensure that overseas bases are not used for reprogramming? I take it that we have no jurisdiction over what happens in other European Union countries. Is there any estimate of how widespread the activity of reprogramming is? The Minister was good enough to give some examples. Is this activity limited to some big crooks; or do we take it that almost anyone with know-how can manage to manipulate mobile phones? What consultations are taking place with the mobile phone industry to ensure that there is a programme of public education about the seriousness of using phones which have been tampered with?
	Will the Minister explain the rationale underlying the five years' imprisonment? How was that period arrived at? The penalty is severe but I suspect that the maximum would apply only in exceptional cases where widespread recycling of stolen sets was involved. In that case I have no doubt that the custodial option may be appropriate.
	We support the Bill. At present no offence directly covers tampering with the unique identification device on a mobile phone. I suspect that there would be a handling offence under Section 22(1) of the Theft Act—for example, dishonest assistance in the retention, removal, disposal or realisation of stolen goods knowing or believing the same to be stolen. I wish the Bill a speedy passage so that we are able to ensure that the level of this crime diminishes in this country.

Lord Dixon-Smith: My Lords, it is a pleasure to add my voice in support of the Bill. We shall do what we can to speed through the procedures in this House and send the Bill winging on its way to another place as soon as reasonably possible.
	It is a highly technical subject but it is intimately involved with a deep social problem at present: the disastrous increase in street crime. Whether that involves the young stealing for status, the slightly older young stealing to fund a drug habit, or organised crime is neither here nor there. It is a dreadful fact that the advent of the mobile phone, which has been such a blessing in so many ways to so many people, has also become a curse.
	The Bill is particularly welcome because it is a keystone in a tide of action over the summer by the industry—manufacturers and service providers—to try to make these wonderful gadgets useless as soon as possible after they are stolen. That is what it is all about. The manufacturers and the service providers have done a remarkably good job. We have heard about the organisation that they have established. I am grateful for the briefing I have received from that body and others. It has helped me to understand the issues.
	As the Minister said, the remaining key problem—this little Bill is a keystone in the arch—is that it is possible to reprogramme a mobile phone's unique identification number and the service providers cannot crack that problem.
	It is a simple Bill. One could almost say that one has no problems with it. Clause 1 makes the reprogramming of mobile telephones an offence and provides a severe penalty, which I believe is justified. If such reprogramming is an unofficial criminal industry it needs to be stopped. Therefore, the penalties should be severe. Like the Minister, I hope that the number of prosecutions under the legislation will be small. It would be gratifying to find that not everyone was "doing it", as is said. But if people are going to get involved in the activity, they should be aware that the penalties are severe, and rightly so. Like the noble Lord, Lord Dholakia, I have some doubts about the five year penal penalty because the prisons are already overcrowded. It seems to me that heavy financial penalties may well be more appropriate, particularly if the activity is a commercial enterprise.
	We have difficulties with the wording rather than the principle of Clause 2. In order to modify a mobile phone's unique identification number, the object in the clause which one has to have under one's control is a computer. But we all of us have computers. I quote from the Bill:
	"A person commits an offence if he has in his custody . . . anything which may be used for the purpose of changing or interfering with the operation of a unique device identifier".
	The Bill continues,
	"and he intends to use the thing unlawfully for that purpose".
	The other part of the "thing" that is necessary in order to undertake this criminal activity is a particular type of program on the computer. I do not believe that it is a specific type of program. Regrettably, that can be downloaded from the Internet so that when, under Clause 2(2),
	"A person commits an offence if he supplies anything which may be used for the purpose of changing or interfering with the operation of a unique device identifier"
	or he offers to supply, that could apply to both the computer and the program. But, as we have heard, the computer can be sold perfectly innocently and properly. It is used almost universally throughout the country. The program is available. Although we can make it an offence in this country to supply, if it is available on the Internet then it will be available. It seems to me that we have a little difficulty here.
	It comes back to the addition in the Bill of the words "intent" and "belief". I do not know how it is possible to find someone guilty of selling something to a person who intends to use it in an improper way. The purchaser is most unlikely to have confessed to the vendor that that was the intent. For the life of me, I do not see how the vendor could judge such an intent. I think of PC World and Dell which sell computers by the dozen every week. Even though they may make it very plain that the improper use of a computer is an offence, it would be impossible to prevent them selling the computers. Equally, it would be impossible to restrict the availability of the program. As the Explanatory Notes to the Bill state, there are perfectly proper uses for the programs which have nothing to do with criminal activity.
	We shall have to look at Clause 2 of the Bill with a view to trying to tighten up the wording. At the moment I do not believe that it would be effective. Clause 1 is fine and the offence is quite clear. If someone is caught in the act of altering a mobile phone's unique identification number, there is no problem. But if one tries to restrict the availability of equipment we should try to tighten up what is on the face of the Bill in order to make it better before we send it to another place. I do not believe that that will be a great task. I am sure that if we put our heads together before Committee stage we should be able to work out something fairly quickly.
	As I said, this is an important and welcome Bill. In a sense it is a keystone in the arch of measures setting out to reduce what has turned a blessing to society, as I said earlier in my remarks, into a curse for too many people. Therefore, it is a wholly welcome piece of legislation. I shall be very glad to do all I can both to improve it and to get it through the processes as quickly as possible.

Lord Rooker: My Lords, I am most grateful for the tone and the content of the speeches of the noble Lords, Lord Dholakia and Lord Dixon-Smith, on this Bill. Quite clearly, there will be a Committee stage when we shall deal with some of the issues which have been raised.
	Perhaps initially I may deal broadly with some of the points which have been raised. We are not aware of any legislation overseas, but the officials I met this morning from the Department of Trade and Industry stated that they have a plan of action to discuss these matters with overseas governments. Other than our European partners, the key government is the United States of America. If we can get them on board we could be very effective.
	The noble Lord, Lord Dholakia, raised a point about severity of sentences. There is a problem with that. In the Bill it is an either-way offence and therefore a distinction can be drawn between individual theft and the activity of organised criminals. It is the latter who receive the tougher sentences or the unlimited fines. It may be that that is the way to hit such people.
	As regards intent, raised by the noble Lord, Lord Dixon-Smith, both the police and the Crown Prosecution Service have been fully consulted on the development of the new offences. They are confident that they will be able to mount successful investigations and prosecutions. I can say more about that at Committee stage. The police are fully behind the legislation.
	The Bill covers only one aspect of the matter. From August the mobile service providers will be able to make the IMEI number ineffective on all lost or stolen phones. From September it is anticipated that there will be a database shared by the service providers and accessible to the police, which will contain details of all stolen mobile phones. In a way those are extras, but they will provide good armoury. It is hoped that the way the Bill is drafted will take account of the changes in technology. I am not au fait with the technology, but I understand that the new technology is called "blue tooth" technology. I have never heard of the phrase before. I have had it explained to me. It is quite incredible as regards mobile phones. Quite clearly, the future is blue rather than orange but not of a political hue. I am grateful for the remarks of noble Lords and I commend the Bill to the House.
	On Question, Bill read a second time, and committed to a Committee of the Whole House.

Latin America

Baroness Hooper: rose to ask Her Majesty's Government what part they intend to play in the Euro-Latin American summit planned by the Spanish presidency of the European Union, particularly in view of recent developments in Argentina and Mercosur.
	My Lords, when I originally tabled this Unstarred Question, the date of the European Union-Latin American Summit was not known. It now transpires that it will take place in Madrid tomorrow. This debate is, therefore, most timely, if a little at the ultimo momento. My apologies go to those approaching the Box who may have been adversely affected as a result.
	Perhaps I may also add that this morning I was honoured by being appointed a Companion of the Most Distinguished Order of St Michael and St George for services to UK-Latin America relations.

Noble Lords: Hear, hear!

Baroness Hooper: My Lords, this, too, was entirely coincidental, but I feel that this debate is a fitting way to celebrate.
	Perhaps I may begin by congratulating the Spanish presidency on its initiative in calling this EU-Latin American Summit. Again, in the light of recent dramatic events in Venezuela as well as those in Argentina, this is a good opportunity to ensure that Latin American countries are aware of European interest and opportunities for trade and investment so that they do not feel that they are solely dependent on the United States.
	I hope that the Summit will not be a "one-off" and that a regular EU-Latin American dialogue will continue to take place in future years. I urge and ask the Government to make it clear that the United Kingdom supports such a dialogue and has a useful and important, not to say key role to play in promoting further and better links with Latin America.
	Over the past five years Canning House, the Hispanic and Luso Brazilian Council of which I have the honour to be president, has arranged European Union-themed conferences in Brazil, Mexico, Argentina and Chile, which have tied in with the bilateral negotiations for free trade agreements between the EU and Mexico, the EU and Chile and between the EU and the Mercosur countries, Argentina, Brazil, Paraguay and Uruguay.
	The only such agreement to come into effect so far is the Mexican agreement. The Mexican Minister for the economy, who was in London last week, told me that Mexico's trade with the EU has already increased by 20 per cent as a result. That must be good news. I therefore ask the Government to play a role in ensuring that the negotiations with Chile are concluded as rapidly as possible and that the more complex negotiations with Mercosur are pursued vigorously.
	As I understand it, the stumbling block, as ever, in the negotiations is that of the common agricultural policy and its system of subsidies, given that primary agricultural products form a significant element of the economies of all four Mercosur countries.
	We all know that further reform of the CAP is—and has been for a long time—high on the UK agenda. Therefore, in this, our interests coincide. I hope that the Minister will be able to reassure us as to the progress of these important negotiations.
	In discussing the EU/Mercosur relationship, it may be of value to examine Mercosur and its members in a little more detail. As a regional organisation, Mercosur—which literally means the southern market—looked to our experience in the Common Market, now the European Union, and started in 1991 (some 11 years ago) with four members—two large and two small: Brazil and Argentina, Paraguay and Uruguay. It has since concluded a special association agreement with Chile, and similar arrangements are under discussion with Mexico and Venezuela.
	Intra-regional trade increased enormously and tariff barriers have been systematically reduced. Even in the political field there has been benefit. A few years ago, when the incident took place in Paraguay and it looked as though the military were taking over, under the pressure of the other Mercosur partners the country succeeded in maintaining a democratic process. That, too, must be very good news.
	Mercosur has helped its member countries to weather the previous world and regional recessions, and two years ago its member countries could be said to have fulfilled the Maastricht criteria rather better than some European countries. It is true that when Brazil devalued the real by 28 per cent some three years ago, Argentina was adversely affected because of its increased volume of exports to Brazil: its hands were tied because the peso was tied to the dollar. That was not the sole cause of Argentina's present troubles, but it was undoubtedly a factor. But on the whole, Mercosur has proceeded at a cracking pace. I hope that the present troubles, caused largely by the situation in Argentina, will not prevent it from continuing.
	The current troubles in Argentina have been a shock to us all. From the UK point of view, we have many special links with Argentina. There was the historic support for the independence movement provided by George Canning to San Marti, and the liberation of the Southern Cone countries at the beginning of the 19th century. There is a long-standing British-Argentine community; there are English-speaking schools; and the English Speaking Union and other such organisations are based there. I have led trade missions there, as have other noble Lords, to promote and consolidate this special relationship and to increase our trade. I very much hope that current British investments, particularly in the energy field—British Gas has an important stake there—as well as in banking and in traditional companies such as ICI, will continue to hang on in there.
	Victor Borges, the famous Argentine thinker and writer, once said:
	"To understand Argentina you have to understand Europe—Argentina is a country of European exiles".
	Europe must stand by Argentina as it goes through its present agonising period of reconstruction and reorganisation, and we must be constructive in our suggestions.
	We must remember that, for example, an individual living in Buenos Aires enjoyed a lifestyle very similar to ours. There is a strong middle class in Argentina. They, as well as the increasing numbers of people below the poverty line—with real levels of unemployment at 30 per cent in some places—are having a very bad time. I do not think it is too dramatic to say that it could happen to us. Life in Argentina was very good. It is very sad to think what is happening now.
	We are all looking to the IMF to provide a solution. Perhaps the IMF should have done something three years ago, when Brazil devalued its currency. Perhaps the provisions of Chapter 11 should have come into play at that stage. My suggestion, therefore, is that the Government should press our European partners not only to stand by Argentina in this crisis but to look more generally at the way in which the IMF operates and reacts, so that preventive action can be encouraged before it is too late.
	Because of the time factor, I have dwelt on the countries which are the particular focus of my Question. However, there are many issues affecting Chile, Peru, Colombia, Ecuador, Venezuela and the Central American countries which will doubtless arise at the summit—such as the prevention and containment of the narcotics trade, as regards which Britain, as a consumer country, is working with many of the producer countries. There are the law and order issues, where again we can co-operate and exchange ideas for best practice. There are endless cultural opportunities. The British Council plays a very positive role in that respect, as does Canning House. We look forward in particular to the Aztec exhibition which is due to take place at the Royal Academy in November this year, and which we hope will be opened by President Fox of Mexico. It will be the largest collection of Aztec art and artefacts ever to be put on show.
	Given my admitted partiality for the region, perhaps I may be permitted to summarise by saying: the good news is that the democratic processes remain in place in all these countries. Inflation remains under control. Looking at the broad picture, it is interesting to note that foreign direct investment continues to flow into the region and portfolio investors, encouraged by greater global liquidity, are recognising the good value that can be found in companies in Latin America. The collapse of Enron has perhaps shown that even major groups in the developed world are not without risk; and in terms of emerging markets, Latin America is a star. I feel sure that the Government, and particularly the Minister with responsibility for Latin America, Denis MacShane, will make this known and will improve on the position.
	In conclusion, perhaps I may thank all those who will contribute to the debate and say how much I look forward to the Minister's reply. I hope that we may receive some feedback from the summit meeting in due course.

Lord Brennan: My Lords, I am sure that I speak on behalf of the whole House—those present and those absent—in congratulating the noble Baroness, Lady Hooper, on the honour accorded her today. It is a signal recognition of all that she has done over so many years to promote relationships between our country and South America. It is also a recognition of the depth of the relationships that have extended over centuries between our two regions.
	This is an important debate. Of all the nations outside the British Commonwealth (England and its ex-colonies) the one European nation which has the greatest connection with the developing world is Spain. It is a happy coincidence that the Spanish presidency should coincide with the Latin American summit this weekend. It is a happy coincidence not only culturally but economically.
	The two topics that I wish to raise for consideration are, first, business and, secondly, people. In regard to business, it should be noted by the rest of South America that the two countries, Mexico and Chile, with which the European Union has reached economic accords, have achieved that result by free market development, economic and political stability and a firm intention to develop their countries' economies towards Europe as well as north towards America.
	Mexico and Europe have over £1 billion of trade a year. Some 23 per cent of Mexico's foreign investors are European companies. It is a country which can look forward to a confident future with the help of Europe, as can Chile.
	That example should be followed by the inter-regional contact established between the European Union and Mercosur. From the many meetings that have taken place, there now appears to be a finality to the future arrangements in terms of political dialogue, economic co-operation and the promotion of common business interests.
	There are two aspects that I would emphasise. If it works, the Mercosur example should be followed by the Andean countries and it should act as an encouragement to Mexico and the Central American countries which are themselves considering a common market arrangement in that part of the world.
	The one sector in which this country should play its part in developing its European contacts with South America is the energy sector. Petrol and gas exploration, which is central to our national economy domestically and abroad, is a major element of future investment and development in South America. Britain should play its part nationally and through Europe.
	All in all, Europe works well with South America, a relationship promoted in particular by this country and Spain. Business works only if those participating in it share common values and common trust. I shall refer to two countries whose people need co-operation from our end in a very important way. The first is Colombia. That blighted country has 1.5 million displaced people, of whom more than 1 million are children. Those internal refugees are living in dire circumstances. Europe has a major programme, of which we should be proud. We should ask yet more of it to help that country.
	I turn finally to Argentina. It beggars belief that the fourth or fifth richest country in the world at the end of the Second World War should be in its present disastrous condition. How could it happen? There are many theories and many beliefs. But it is solutions we should be looking for, not explanations. Nearly half the population of an educated and civilised country are living in poverty or near poverty. The middle class is on its knees. It is a country whose people have no confidence whatever in either politicians or public institutions.
	That terrible state of affairs demands our help. It is difficult to know precisely how such help can be given, but Europe is an obvious source of rescue for a country whose people deserve it whatever we think of its politicians who have produced the present situation.
	Those are two examples of countries in a continent experiencing much difficulty but where great hope still exists. It is a hope that Europe should nurture, both in business and with regard to people. How far we in Europe have come with those in the Americas! Many years ago my Spanish wife asked an Irish relative of mine the word in Irish for mañana to which he replied that there was no word that embraced such a sense of urgency.
	The Government's timing is most efficient. Our debate is taking place on the day before the international conference. I hope that our comments will be heard and that my noble friend the Minister will tell us in due course that the United Kingdom will play a full part in European Union efforts to improve business and the progress of the people in South America.

Baroness Thomas of Walliswood: My Lords, I join the noble Lord, Lord Brennan, in offering my sincere congratulations to the noble Baroness, Lady Hooper, on her honour, which is very much deserved. She and one or two others have kept the flag of Latin America flying in the House and she thoroughly deserves the acknowledgement that she has now achieved for all her work here and in Latin America.
	I also welcome the role of the Spanish presidency and the Euro-Latin American Summit. In the early days of the European Community the United Kingdom was regarded as particularly well placed to keep open the channel of communication between Europe and the United States—Norte America in Latin American parlance.
	Now Spain can demonstrate its special role vis-à-vis Latin America, which is a sub-continent that some people in this country and in this place feel has been somewhat neglected by us in modern times. I remember being in Cuba, where Spanish colonial rule is a good deal more recent than in other parts of Latin America, and admiring the way in which the Spaniards could swim through those dangerous currents and conduct good commercial relationships with that difficult country.
	This initiative can be seen in different ways, both in Latin America and the European Union, as a recognition of the substantial social and economic strength of the region. It is an indication that the EU and its members could provide another powerful partner to balance the United States, or as the culmination of a number of trade negotiations that have been running for some time, either bilaterally, as with Chile, or with Mercosur, the negotiations of which have been described in great detail.
	I remind the House that during his visit to Brazil in August last year the Prime Minister said that the EU should overcome its old practices of farm subsidies and trade barriers which disrupted the economy and hurt developing countries. Do the Government now feel that a treaty with Mercosur is still available, if not immediately, then in the fairly short term, especially as a similar sort of arrangement appears to be on the verge of being successfully concluded with Chile?
	A major source of concern for all participants in the summit must be the current parlous condition of Argentina financially, economically and politically. Banks have closed or been suspended; the currency has plunged against the dollar and is not in use as a means of exchange in some parts of the country. The noble Lord, Lord Brennan, reminded us that Argentina was one of the most powerful and richest countries in the world not that long ago. Output is expected to decline by 10 to 15 per cent this year. The numbers of unemployed and the poor grow and the political processes seem incapable of resolving such situations. One must ask what others can do. I want to follow the noble Lord, Lord Brennan, in asking whether the UK Government think that any action on behalf of the EU could assist Argentina in its current plight and what such action might be. Are proposals of support expected to come out of this summit? If so, what conditions might be required of Argentina in terms of better governance?
	Argentina is not the only country in Latin America which faces difficulties. In Colombia a drug-fuelled war still rages. The Government of Venezuela have recently been badly shaken, although they may yet re-establish themselves. Peru, Ecuador, Paraguay and Bolivia are still very poor, although they are no longer among the poorest nations in the world.
	Vincente Fox, the first non-PRI president of Mexico for 70 years, is not finding it easy to bring in the tax, constitutional and economic reforms with which he wanted to modernise and transform his country.
	Cuba still manages to defy the US embargo, which is now 40 years old, and still, by its very existence, causes ripples of unease as neighbours pick their way between Castro and Uncle Sam. In fact, it would be interesting to know whether Fidel Castro has been invited to this conference; and, if so, whether he will attend. He is one of the least travelled and longest serving heads of state in the world today.
	However, one should not allow doom and gloom to dominate one's view of Latin America. As has already been said, its people have a strong dose of what one might call "Europeanism". They are well educated in comparative terms. When I lived in Peru 30 years ago, I remember being convinced—with some reason—that there would be more illiterate people in Peru and in all of Latin America, both as a percentage of the population and in absolute terms, by the end of the century than was the case at that time. I have been proved completely, and thankfully, wrong. Widespread education provision is available to a large percentage of the population in all the Latin American countries.
	People in Latin America have also achieved much in other ways; for example, access to clean water, which is always a guide to health, is widely available. Indeed, the majority of the population in most of its countries now have access to clean water. Moreover, the use of contraceptives has increased enormously and infant mortality has significantly reduced in the recent past. These countries have a great deal to offer to the world, even if they sometimes seem curiously unable to preserve a stable government for any useful length of time. There must be something that we can do to assist them—we, who represent some of the most powerful, rich and reasonably well-governed countries—to play their full part in the world and to maintain good relations with us. I hope that the Minister will be able to reassure us that the United Kingdom will play a full part in the summit to promote such ideas.

Lord Thomas of Swynnerton: My Lords, before the noble Baroness concludes, perhaps I may inform her that according to Spanish press reports President Castro of Cuba applied for a visa at the Spanish embassy the day before yesterday.

Baroness Thomas of Walliswood: My Lords, sometimes President Castro is not as quick on the draw as one might suppose. Let us hope that he makes it to the summit.

Lord Faulkner of Worcester: My Lords, the House is indebted to the noble Baroness, Lady Hooper, for instigating this debate. I am pleased to intervene briefly in my capacity as secretary of the British-Argentine Parliamentary Group. The noble Baroness is our distinguished vice-chairman. I am delighted to join other speakers in congratulating her on her honour. Her work in the region has been outstanding over many years. It is very gratifying to see her recognised in this way.
	As my noble friend Lord Brennan said, the economic and social difficulties facing Argentina are immense, and, for us, their scale is difficult to comprehend. They have had nearly four years of recession, a reduction of 4 per cent in its GDP in 2001, an unemployment rate of over 20 per cent, and one-third of the population is now living in poverty. That is the background against which the government of President Duhalde took office.
	Many of us who are happy to be regarded as friends of Argentina and its people looked on in disbelief at the television coverage over Christmas of civil disorder, looting of shops, and other displays of public fury at the consequences of economic collapse, especially those affecting the value of savings deposited in the banks. It must have crossed many people's minds—it certainly crossed mine—that a return to military dictatorship might not have been very far away. But, thankfully, that has not happened, and the democratic system remains in place.
	The institutions of the country, law and order, and democracy have survived, despite awful recent events. Elections are planned for September of next year, and we must hope that they take place. The only form of destabilisation that we hope has applied in Argentina relates to the national football team, certainly as far as concerns the forthcoming match on 7th June. However, we should all hope that the adoption of a flexible exchange rate system, the devaluation of the peso, and the other measures that have been put in place, succeed in helping Argentine products regain their competitive edge in international markets, and provide an economic recovery largely led by exports. In this fragile situation, the last thing that Argentina needs is any resurgence of protectionism on the part of its principal trading partners; namely, the United States and the European Union. I shall return later to the issue of protectionism.
	As the noble Baroness, Lady Hooper, said, Mercosur is an enormously important and potentially attractive economic block. It has a population of 209 million inhabitants, with a combined GDP of 1.071 billion dollars. It is the most important integrated market after NAFTA, the European Union, and Japan.
	The performance of Mercosur in promoting regional trade and integration has already been impressive. Between 1990 and 2000 trade within the group grew by 328 per cent, from 4.1 billion dollars to 17.7 billion dollars. Outside the group, Mercosur trade with the rest of the world increased by 178 per cent during the same 10-year span. In particular, European Union exports to Mercosur rose by 254 per cent in that period.
	The bloc has also succeeded in attracting foreign direct investment to its member countries with one of the best performances among emerging markets after China. Argentina alone received 98.7 billion dollars of total foreign investment between 1994-2001, and European Union countries were the leading investors with an inflow of 53.1 billion dollars—which accounts for 54 per cent of the total.
	Trade and economic bilateral relations between Argentina and the United Kingdom have also benefited from the development of Mercosur. British companies that invested in Argentina have been able to use that as a base from which to expand business in the wider regional market. If the Argentine economy stabilises itself, as we all hope it will, Mercosur will be a very attractive market for encouraging trade and investment opportunities with European Union countries generally. When he replies, I hope that my noble friend the Minister will be able to say that the Government will do their best to promote this within the Community, especially at the forthcoming conferences.
	Mercosur is playing an important part in helping to set up the Free Trade Area of the Americas (the FTAA), following the summit held in December 1994 in Miami attended by heads of state and governments of the 34 democracies in the region. The aim is to complete negotiations for the single market by January 2005, and eliminate barriers to trade and investment. The FTAA could create a market of 780 million inhabitants, 10 trillion dollars of GDP—that is, one-third of the world's GDP—and more than 20 per cent of world trade.
	Mercosur is also engaged in negotiations with the European Union, with the aim of achieving gradual and reciprocal trade liberalisation. This follows a framework treaty signed in Madrid in 1995. The ultimate aim is to establish a free trade area with the European Union. In the sixth round of negotiations held in Brussels last year, Mercosur presented a proposal asking the EU to adopt a number of measures to eliminate trade barriers that affected bilateral trade, such as agricultural export subsidies. Indeed, the noble Baroness referred to the common agricultural policy and the block that that is imposing at present on this sort of important development.
	The second European Union-Mercosur summit in Madrid offers a great opportunity to give a new impetus to the bilateral trade and economic negotiations process, so that it will then be possible to move on to the next stage of the negotiations. It is very much in Europe's interest to speed up the process, because a free trade zone stretching from Alaska to Tierra del Fuego could give the United States a huge competitive advantage in the region, if that was at the same time accompanied by trade liberalisation between Mercosur and the European Union. I hope that my noble friend will agree with that and confirm that the Government see themselves as having a role to play in providing a bridge between the EU and Latin and South America.

Lord Moynihan: My Lords, it will come as no surprise to your Lordships' House that I believe that Her Majesty's Government should play a major part in the Euro-Latin American Summit. Our deep-rooted and longstanding historical ties of friendship and trade provide us with a solid foundation for our relationship with Latin America. In the 19th century, British engineers in Latin America built ports and railways, and British entrepreneurs provided capital to finance foreign trade and to launch the oil industry. In more recent years, the work of the British Council and the BBC World Service, as well as trade organisations such as the Latin American Trade Advisory Group, the UK/Brazil Joint Business Council and the UK/Colombia Trade Facilitation Group—in addition to Europe's generalised system of preferences and a series of EU horizontal programmes, as well as the EU co-operation strategy—have brought us much respect in the region and have succeeded both in bringing our business communities together and in establishing, cultural, social, economic and political contacts.
	In an interdependent world, all countries face common challenges: how to compete and prosper in a world economy; how to halt the spread of weapons of mass destruction; how to prevent terrorism and stop the production, trafficking and consumption of drugs; how to reconcile economic growth with the sustainable use of shared natural resources; how to protect our environment; and, critically, how to strengthen at home and abroad the rule of law and democracy upon which foundations are built for future security, stability and prosperity.
	The countries of Latin America, and Mercosur in particular, are natural partners in seeking to address these challenges. I hope that the Minister will take this opportunity to outline the Government's policy goals and the means by which these goals will be achieved with this in mind. These policy goals should include not only trade and economic issues but also the promotion of democratic institutions and respect for human rights; the improvement of judicial systems to ensure they deliver transparent, equitable justice; the fight against drugs and transnational crime; the importance of sustainable development and the encouragement of sound environmental practices; and the substantial reduction of poverty through growth and job creation, as well as assistance in the creation of better health and education systems.
	For the sake of brevity, I shall concentrate my remarks on a number of key themes which I believe to be a priority in Europe's relationship with Latin America today. Economic liberalisation and free trade are two of the pillars upon which the architecture of a market economy are built. Britain has long been one of the foremost advocates of efforts to liberalise world trade and pursue transatlantic and global free trade. As long as trading blocs are inclusive and not exclusive and as long as the development of trading relations within blocs is not at the expense of economic relations with the outside world, regional integration is to be welcomed. NAFTA, Mercosur, the Andean Pact, the Group of Three, the Central American Common Market and a host of European multilateral and bilateral free-trade agreements are all evidence of the vigour with which Latin American economies have embraced the principles of liberalisation and open markets.
	Indeed, Mercosur, the common market of the southern cone, is now the fourth largest trading bloc in the world, identified by the Export Forum as one of the key target areas for the United Kingdom. Like the noble Lord, Lord Faulkner, I hope that the Minister is equally confident that the aim of a free trade area of the Americas will contribute to greater growth in the region and wider opportunities for trade.
	One key matter of importance to those attending the Euro-Latin American Summit is democratic development. I hear what my noble friend Lady Hooper has said—I also congratulate her most warmly on her honour—but neither democracy nor prosperity can endure unless they are broadly based. The policies of free markets and open investments which are the key to sustained growth will not be fully unlocked while people feel shut out or left behind. Fairness before the law is not an option for some while institutional weaknesses remain. As in some parts of Asia, a booming economy can be hijacked by corruption and lack of transparency and accountability.
	I hope that the Minister will take the opportunity to say what initiatives the Government propose to take with our European colleagues to encourage the development of democratic institutions, legal systems, reliable civil services and higher levels of citizen participation, so that the region's economic success is firmly underpinned by a higher level of democratic development, a robust civil society and a broad-based middle class.
	I should like in conclusion to say a few words about drugs. The global drug industry is particularly associated with the cartels of Latin America. I applaud the steps the countries of the region have taken to cut coca production, criminalise money laundering and permit extradition. However, the evil of drug abuse knows no borders. It is incumbent upon us to continue to provide counter-narcotics assistance to Latin American countries both bilaterally and through international organisations such as the European Union in order to reduce the tragedies caused by the abuse of drugs both in the United Kingdom and the region.
	Colombia is a country in the front line of the fight against drugs and the war against drugs traffickers. Some 80 per cent of the world's cocaine supply is produced in Colombia or transits that country. It therefore must be a top priority to tackle the problem at source in Colombia, for what happens to the drugs trade in Colombia affects every government involved in the battle to stamp out drugs. I echo the reflections of the noble Lord, Lord Brennan, on this subject.
	As I have said before in this House, Europe and Latin America have a joint interest in political stability, the promotion of democracy, the security of our investments and in further developing a thriving and growing trade partnership. I say to the Minister that Latin America, and in particular Argentina at this time, offers a compelling case for closer, active British and European engagement. I look forward to his response.

Lord Lea of Crondall: My Lords, I join in congratulating the noble Baroness, Lady Hooper, on her new honour. As has been said, as president of Canning House, she has worked assiduously to improve relations between this country and Latin America. She must be very pleased about the happy coincidence of the honour bestowed on her, today's debate, and the very high profile now assumed by relations between the European Union and Latin America, as demonstrated by tomorrow's prime ministerial-level meeting in Madrid. I understand that, as has been said, that meeting will be starting at 9 am mañana.
	Perhaps I can illustrate the work done by the noble Baroness, Lady Hooper, by giving one small example. After a parliamentary delegation of which I was a member returned from Bolivia, a group of us, with the noble Baroness, held a meeting with the director of the British Museum, to see whether we could ensure that the right contacts were being made with the Andean ambassadors in relation to the creation of a gallery of Andean civilisation. We shall be delighted to see that project going forward soon. Incidentally, Bolivia is, I think, the one country that straddles Mercosur and the Andean Pact. Cultural tourism in the Andes is not yet quite the thing for the grey generation, but I am quite sure that it will develop as one of the most sought-after experiences.
	As I am mentioning distinguished colleagues in this field, I am delighted to see that my speech will be followed by that of the noble Lord, Lord Thomas of Swynnerton, who could forget 99 per cent of what he knows about the subject and still know a lot more about it than I do.
	Following preceding comments, I shall briefly contrast Bolivia with Colombia. When we were in Bolivia, it was said that the elimination of coca growing by the peasants, and the reduction of smuggling of the drug, was costing the country 500 million dollars annually in lost trade. The EU and the US helped fill the gap of 500 million dollars by giving 50 million dollars each.
	While we were in Bolivia Plan Colombia was announced under which the US provided 3 billion dollars to Colombia. Some Bolivians asked us rather plaintively, indeed, rather resentfully, "Do we have to cause as much trouble as Colombia to get that sort of money"? I am afraid that the answer is "Yes". It is rather like the upside down world experienced recently in the Balkans where the EU is still spending 1 billion euros on aid but 5 billion euros a year on ongoing military security expenditure. The Foreign Secretary and the United Nations have adopted an imaginative new outlook as regards the new programme of considering failing states before they become a mess. That constitutes an important challenge to the world community; namely, how to approach such a matter with some delicacy as we cannot always sweep up at enormous expense when the real job is to make sure that good governance is taken forward. I pick up the point made by the noble Lord, Lord Moynihan, as regards Bolivia and the Andes, where the key to success concerns the economics of alternative employment.
	It has been said that the developments between the EU and Latin America are reversing the famous Canning dictum which states, if I may paraphrase, that the time has come for the old world of Europe to redress the balance of dominance in Latin America of the United States. That is certainly an idea whose time has come. I argue that the model of Europe—in my case that of Jacques Delors although that does not reflect everyone's view—is far more relevant to Latin America than the American model. The social dialogue that takes place between the EU and Mercosur is a good example. There are a number of reasons for that—language has been mentioned—but the ethnic/religious range of experience is also relevant. That dialogue has made it easier for us to visit many of the Latin American countries. I wish to put on record the thanks of the TUC delegation that recently visited Colombia for the help provided by the Foreign Office. It is never easy to meet imprisoned trade union leaders.
	My limited experience leads me to believe that there is scope for greater EU cohesion—I hope that the Minister will comment on the matter—as regards missions in Latin America in 15 countries from 15 EU countries. I believe that that adds up to 225 delegations. We do not need so much duplication of experts on water supply, for example. Latin America could be used as a test bed as regards joint EU missions. I hope that that point will be commented on.
	I hope that the Minister will also comment on the EU "road map". In parts of eastern, central and south eastern Europe the EU "road map" is not seen as a threat or the EU as a potential protectorate. It is rather like the thing that you fling in the back seat of the car that you pick up when you have lost your way. Even when you think that you are going in the right direction you occasionally look at it. I was interested to note that Chris Patten, in introducing the summit, talked about the launch of the euro, the common foreign and security policy and the beginnings of autonomous military capacity in Europe. He mentioned those matters alongside an enormous range of events leading up to the summit in Madrid and the negotiation of association agreements between the EU and Mercosur and the EU and Chile and so on.
	I refer to Argentina in comparison with Brazil. I very much echo the comments of my noble friend Lord Faulkner of Worcester in that regard. However, it was not so long ago that we did not make any distinction between Argentina and Brazil. President Cardoso was in London recently. I refer to a most fascinating presentation at Canning House showing the enormous social progress and the doubling of productivity and of social provision in Brazil in the past 10 years when inflation was 40 per cent at the start of that period. It now has virtually 100 per cent education provision and AIDS is declining. It would be useful to discuss how some of the elements of that successful model could form part of the EU contribution at the summit to promote the development in a positive direction of all of the economies of Latin America.

Lord Thomas of Swynnerton: My Lords, it is a pleasure to follow the noble Lord, Lord Lea of Crondall, whose remarks about the desirability of Latin America following a European example seem to me to deserve much attention.
	I had the distinct impression that when I had the honour of joining your Lordships' House some 21 years ago the only contact there seemed to be between Latin America and this legislature at Westminster was a distant recollection of a comparison made by Disraeli who said that the Treasury Bench in another place reminded him of,
	"one of those marine landscapes not very uncommon on the coasts of South America. You behold a range of exhausted volcanoes. Not a flame flickers on a single pallid crest. But the situation is still dangerous. There are occasional earthquakes, and ever and anon the dark rumbling of the sea".
	The late Lord Beaconsfield, I should advise your Lordships, had more imagination than experience of Latin America. Things have changed. Judging from the number of distinguished noble Lords who are taking part in this debate, matters have changed radically. Some noble Lords may recall the commercial relations of this country in the 18th century when more Members of this House were shareholders of a South Sea company specially designed to trade with the Spanish empire than were not, but most of us will think of more modern and desirable commercial opportunities for the present.
	Some of us, especially those interested in an ethical foreign policy, will recall how Britain led the way in the 19th century to end the slave trade to Latin America and may even recall that Lord Palmerston was wont to say in his last years that the one thing he was really proud of was ending the slave trade to Brazil. Many noble Lords will recall—as did the noble Lord, Lord Moynihan—how Canning helped Spanish American independence. Others will recall the number of British volunteers who fought for Boliívar, particularly in Venezuela at the battle of Carabobo. Others will remember how a Member of this House no less, Lord Dundonald, when he was Admiral Cochrane, founded the navies of two Latin American countries.
	Other noble Lords will be reminded when thinking of Argentina how once that country was considered to be the sixth dominion and others—this has been touched on—will not be oblivious of the fact that the oil of Mexico carried here by Lord Cowdray seemed to secure victory in the First World War. I am even tempted to remember how two Lords, the third Lord Albermarle and his brother, Admiral Lord Keppel, captured Havana in 1762 and launched Cuba on a rapid era of economic development. I shall address that subject in a lecture in Havana later this year.
	We know that Latin America is composed of old if not always of close friends. As for the future I have eight matters which we should think about in relation to this fascinating continent. First, the history which I have mentioned should be remembered by officials, politicians and businessmen as, for Latin Americans, the history of the British and European relations with Latin America in the past will not be forgotten. Secondly, we should be inspired by the fact that, despite border disputes and a reputation for violence in Latin America and despite refugees, which have been mentioned, interstate wars have practically never occurred. It seems to me that the last interstate war in Latin America was the War of the Pacific in the 1880s, unless we include—I do not really think that we should—Castro's attempts to overthrow other Latin American countries by terror in the 1960s.
	We might also note that despite the fact that there is a multitude of peoples in Latin America—I believe that there are more than 50 separate peoples in Mexico alone, speaking different Indian languages—there is remarkable racial harmony. The Zapotecs and Mixtecs in Mexico might well be able to give Europeans a lesson in harmony. I refer not only to the Balkans. Race relations in general also continue to be relatively harmonious, even in Brazil and Cuba, which have large black populations. Even before the revolution, and probably after it, Cuba has had a relatively good record in terms of black/white relations.
	I turn to literature. Surely someone should mention it. The great writers of Latin America include, for example, the late Octavio Paz, Gabriel García Márquez, Mario Vargas Llosa, Carlos Fuentes and Guillermo Cabrera Infante, a Cuban Englishman whose naturalisation papers I had the honour to sign. All of them exert considerable influence over the intellect and the imagination of Europeans.
	Where too would Europe be, I ask noble Lords, without Latin American music, from the bolero to the salsa?
	The noble Baroness, Lady Hooper, referred to the Aztec exhibition, which will be held in the Royal Academy later this year. In saying that noble Lords should go and see it, I should declare an interest: one of my sons, Isambard, designed the catalogue and I myself have written an essay for it.
	I should refer to Mercosur and drugs, to new democracies and to new opportunities for commercial undertakings. Although I probably could do so, I shall leave that to others. In the short time that I have at my disposal, I conclude by recalling a point that is perhaps equally important. There was a 17th-century saying in Spain that if someone is very good mannered, they are as polite as a Mexican Indian. This House believes that manners make the man. That courtesy, so characteristic of Latin Americans, is now not confined to Indians but extends through all parts of the racial make-up of the continent. That is another reason why we should feel pleased and proud of our growing affectionate attachment to our Latin American cousins.

Baroness Andrews: My Lords, I never thought that I would be able to lay claim to the mantle of Disraeli. However, I speak of Latin America with more enthusiasm, if not imagination, than expertise. It is particularly daunting to follow such a magnificent tour de force, delivered in such celebratory language. The spirit of this debate is celebratory indeed. I join other noble Lords in congratulating the noble Baroness on a magnificent honour, which is magnificently deserved. It is good to share in that this evening.
	I am afraid that almost immediately I shall plunge the House into gloom. I thank the noble Baroness for giving us an opportunity to voice celebration and concern about the future of Latin America. As many noble Lords have said, this debate takes place during turbulent times. Even if we had not had the coincidence of the Madrid Summit, this would have been an extremely timely moment at which to discuss Latin America.
	Far be it from me to talk about Europe—that has already been magnificently covered—but the European Union has been building links with Latin America since its inception. During the past decade we have celebrated and rejoiced as Latin America and Europe have grown closer together—we have doubled our trade and we have begun to build up agreements with Mexico, in particular, Chile and of course Mercosur. Those are the foundations for a much better future.
	It is not simply in response to their roles as major trading partners that we should be concerned about the collapse of the Argentinian economy, the peace talks in Colombia or the chaos in Venezuela. We should also reflect on what those traumatic events mean for our international and Atlantic relationships and our hopes for building stronger civil societies. Even without the Madrid Summit we should surely be concerned, if we are to meet our own international development targets, that after a decade of reform and democracy income equalities are still widening across Latin America. Two in five people in Latin America live on less than two US dollars a day—that is, 168 million people—and 77 million of them live on less than one US dollar a day. Moreover, 80 per cent of all the indigenous people fall into that category. Fuelling that continuing poverty, particularly in Central America, is the failure to ensure that education reaches the poorest.
	The debate asks the Government what role they intend to play in the summit. I believe—I absolutely follow the remarks of the noble Lord, Lord Thomas, in this respect—that we should ensure that at the first opportunity the summit should celebrate and promote the great economic and social diversity. Far more people know about the violence and the salsa than about the great liberal traditions and the great literature. It should also make it crystal clear that investment in Latin America—and in greater social protection and civil society—is not an act of international charity but a global safeguard. The EU's own five-year regional strategy document makes it clear that the political challenge internally in Latin America is to consolidate democracy and the rule of law and that the international challenge is to encourage the capacity of the countries of the region to take a more active part in international policy.
	Those must be the priorities, because unless Latin American countries become more involved in international discourse and international action, we will never win against international terrorism or global poverty, as we want to do. We need the intelligence, the humanity and the practical experience that Latin America can bring in that respect.
	I hope that the UK would will work hard to ensure that the summit takes every opportunity to respond to the "deepening gloom" across Latin America. I hope that we will make a positive and optimistic response to that by taking the lead in promoting an enhanced commitment to building democracy. It is time to reinforce what we can do. For 10 years we have rejoiced in the growing democracies. That would not have been possible without the courage and determination of the people of Chile, Venezuela or Argentina. The agreements that we have created bear witness to the relationship between economic growth and democracy in the democratic clauses that are attached to the agreements.
	However, the reality check is that after decades of collaboration and support, economic growth has not meant better lives for the poorest. Human rights, as the noble Lord, Lord Moynihan, said, still have a fragile hold in many countries in Latin America. The débâcle in Venezuela, with the attempted overthrow of President Chávez, the continuing trauma in Argentina and the festering corruption and violence witnessed in Central America are all evidence of how fragile those democracies are. I endorse all of the calls that have been made for us to stand by Argentina as best we can.
	I hope that our Government will take every opportunity at the summit to raise the confidence of European investors as a whole, but also to commit to a practical and realistic programme with robust systems of accountability, particularly for technical, social and educational assistance.
	I hope that we will give a special priority to educational assistance. Unless we do that, neither aid nor trade will ultimately make a difference in the long run. The needs are immense: more resources for more schools, particularly in the rural areas; more teachers and teacher trainers; more vocational trainers; more technicians and engineers; more advisers; and more appropriate technologies. In the short term I think of the gifted and dedicated Argentinian teachers I know. They look to Europe for advice and support. Although they are now living off their savings, they continue to teach, despite not having been paid, because they know that the future of their children is their only future. I think of the very bright children whom I have seen in remote areas of Guatemala and Honduras who are taught in schools which have bare walls, a few benches and hardly any resources to speak of and yet who believe that the future is for them. Therefore, I hope that the summit will make a priority of meeting their human rights through education.
	I also hope that it will recognise that attaching a democracy clause to trade agreements means having to take action when there are defaults on human rights. I hope that it will mobilise the range of investment that is needed for greater equality as well as greater growth. Above all, I hope that Chris Patten is right when he says that the summit,
	"provides a high profile platform to make a substantial joint contribution to stabilising the international environment, economically as well as politically".

Lord Maclennan of Rogart: My Lords, I, too, congratulate the noble Baroness, Lady Hooper, on receiving her honour and on initiating such a wide-ranging and timely debate. I hope that she feels rewarded by the knowledge that has been deployed in the debate and by the evident interest in and feeling for Latin America that has been displayed by all who have spoken so eloquently about its needs.
	In this country, despite our recognition of Latin America's trading importance and our interest, and the interest of successive governments, in promoting democracy and human rights there, too often, after the high drama has been played out, the press loses interest. Therefore, I believe that this debate is valuable, coming as it does on the eve of the most welcome Spanish initiative in holding the Euro-Latin American Summit in Madrid. It gives Europe an opportunity to develop the co-operation which was begun across a wide front on foundations laid in Rio in June 1999.
	The EU is the first trading partner of Mercosur, Chile and the Andean group. The decade from 1990 saw a doubling of European Union trade with Latin America, with exports from Europe reaching 54.5 million euros. European firms have played a significant role in the privatisation process. Between 1996 and 1999 the European Union became the largest source of direct investment in Latin America.
	We also welcome the progress in the negotiations on liberalising trade. Those have already extended to agricultural exports with Mercosur and Chile. I hope that, in replying, the Minister will be able to say something on the progress made in the April talks in Buenos Aires, particularly on political co-operation and trade facilitation measures.
	With regard to Mercosur, I simply say that its objectives seem entirely admirable. I slightly regret that it has followed almost exclusively an intergovernmental approach, not following the European pattern of initiatives from a body comparable to the Commission. I believe that that has resulted in it being somewhat slower to achieve its goals than might otherwise have been the case.
	Turning to the Madrid summit, I notice in the letter sent to all the participating heads of government that our own Prime Minister was asked by Prime Minister Aznar to introduce the subject of international terrorism. I hope that Tony Blair will tackle not only terrorism in that context but also the causes of terrorism, for that is where I believe the European Union has a particular role to play in Latin America.
	In a debate as brief as this, it is difficult to decide whether to do a complete tour d'horizon—a historical analysis as brilliant as that of the noble Lord, Lord Thomas—or to decide where to point the searchlight. I am afraid that I have felt it necessary to focus particularly upon the parlous condition of Argentina. Its spectacular debt default in December casts a lurid light over the scene, and it is the most present destabilising threat to the continent, which has, to some extent understandably, resisted the worst of the fall-out.
	It would be hard to exaggerate the awfulness of the Argentinian financial disaster. However, I believe that there are some parallels with the Russian default of 1998. But Argentina appears to lack a President Putin to face down corrupt provincial oligarchs and governors whose attitudes to public spending, failure to collect taxes and willingness to print provincial money threatens hyper-inflation—perhaps as high as 60 per cent this year—and a massive decline in GDP, possibly by as much as 11 per cent this year. The hardship that that involves scarcely needs to be spelled out to the House.
	The IMF, which has bailed out Argentina before without securing the required reforms, has no choice but to insist on the necessary painful disciplines. Argentina's federal government must refuse the bail-out money to the provincial governments. An anti-corruption campaign must be mounted and with urgency, taking on the tainted judges, congressmen, civil servants and others who have sapped confidence in the ability of the country to govern itself.
	Order must be restored to the banking system, the payments system and the foreign exchange market. Economy Minister Lavagna needs all the technical help that he can find from the international community, and particularly from the European Union—his most important trading partner. The need is to restore investor confidence. The role of private capital is the key to this resource-rich country and not another bail-out from the IMF. The bankruptcy code needs to be reformed and creditors need to be able to recover their assets. However, what has been called the "standard cold turkey approach" is unlikely to succeed unless domestic and international confidence is restored by the active involvement in that process of internationally respected monitors and advisers—here, again, Europe could play its part, perhaps through members of the Bank for International Settlements—reporting to the Argentinians and the world that the painful adjustments are being made.
	Russia has shown that short-term pain can quite quickly lead to a real turn-round. If the pitfalls of the quick fix are to be avoided and if investment is to be resumed, workers must become profit-sharers and equity holders. Privatised business must cease to be monopolistic.
	Finally, I draw attention to the wise words of Anne Krueger, the deputy managing director of the IMF, spoken less than a week ago when she drew attention to the importance in the context of Argentina of strengthening,
	"the social safety net at this time".
	That is where the public funding must not be cut. I have no doubt that, in the talks in Madrid, our Government will seek to impart to their European partners the urgency which is required to save that great nation and rich country from economic, social and political collapse.

Baroness Rawlings: My Lords, I, too, extend my appreciation to my noble friend Baroness Hooper for initiating this debate. I congratulate her on her timing and her very well-deserved honour.
	It is always so worth while listening to the noble Lord, Lord Thomas of Swynnerton, who has such a wealth of expertise and experience in this area, and to the other well-informed and interesting contributions from all noble Lords who have spoken during the debate.
	Summits such as this one are essential in building on the cultural and economic relationships that we are forming with Latin America. The first summit of leaders from the European Union, Latin America and the Caribbean, which took place in Brazil in 1999, marked the start of a new strategic partnership. It increased mutual understanding in the political, economic and cultural spheres.
	The objective then was to strengthen political, economic and cultural understanding between the two regions in order to encourage further development. It is therefore timely that in the coming days we shall have the opportunity to evaluate the progress since the Rio summit and to set the direction for the future of the partnership. It is also timely as the European Union has undergone a significant transformation with the launch of the euro in 12 member states.
	Over the past few years, the European Union has gradually deepened its economic and trade links with Latin America, at a bilateral level with Mexico and Chile and at a regional level with the "Mercado del Sur" or Mercosur. Indeed, the European Union is Latin America's second trading partner, being the first partner for Mercosur and Chile. We have enjoyed close links with Mercosur since its creation in 1991, witnessing the process of regional integration between Argentina, Brazil, Paraguay and Uruguay and providing technical and institutional support. That has resulted in a doubling of trade between 1990 and 2000. Trade at the bilateral level has also been nurtured. As neither Mexico nor Chile belong to any regional Latin American groups, they have developed stronger bilateral links with the European Union. Mexico is the only country on the American continent actually to have signed a European free-trade agreement with the European Union.
	However, we have also heard that while much progress has been made, the continent is now facing a serious financial crisis and economic instability. Argentina, which, as we have heard from the noble Lord, Lord Brennan, is a wonderful country with educated people, is going through a difficult period. There has been a 70 per cent fall in the value of the peso since the 11-year peg to the US dollar was ended in January, which has sent the prices of imported goods soaring. According to a survey by the Argentine business chamber, CAME, the prices of fresh eggs and vegetable oils, as well as the prices of computers and televisions, have risen by between 100 per cent and 200 per cent.
	The new Argentinian Government have devalued their currency by at least 30 per cent in order to boost exports and to help restore Argentina's foreign currency earnings, which may be needed to pay off huge foreign debts. There is an unfortunate consequence, however, for those businesses that have invested in Argentina and which may now suffer as their investments in the country become less valuable. I fully support my noble friend Lady Hooper and the noble Baroness, Lady Andrews, in saying that we should help Argentina in whatever way we can to overcome her present problems.
	In contrast to its regional peers, the Peruvian economy is pulling clear from a recession. Last year it even managed to edge out a slight increase in growth. So far, however, the recovery remains based on two singular events: the ramp-up of commercial production at the Antamina copper-zinc mine, which is on its way to becoming one of the country's largest mining operations, and additional public spending. That in no way represents an economic recovery, so it is with sadness that at this stage the Government see fit to close the CDC office in Peru.
	The European Union needs to maintain a close relationship with Latin America if we are to continue to have a major and positive effect on improving economic and social development. There is a risk that governments will become distracted by the financial crisis, creating an opportunity for an increase in drug trafficking, money laundering, drug abuse, organised crime and, of course, terrorism, as we heard from my noble friend Lord Moynihan.
	The European Commissioner, Chris Patten, was right when he said that the Madrid summit,
	"represents the opportunity to build upon the common foundations which we put in place at Rio and to launch specific and ambitious initiatives to strengthen our ties".
	The summit will provide a high-profile platform to make a substantial joint contribution to stabilising the international environment, economically as well as politically. We on this side of the House look forward to the Minister's response and a further Statement on the summit. We also hope that the Government will play an active and a supportive role at the Madrid summit, not only to further economic and cultural links, but to bring stability to the region.

Lord Grocott: My Lords, we have had an extremely interesting and wide-ranging debate. If this were a sermon for which I needed a text, my noble friend Lord Brennan has provided me with one. He described the countries concerned in this debate as countries of "much difficulty but great hope". I am grateful to him for that text as it sums up a number of contributions.
	I also congratulate the noble Baroness, Lady Hooper. By now she must be feeling embarrassed by the adulation. She said that the timing of the debate was a pure coincidence. As well as her knowledge of Latin America I thought that maybe she had considerable skills in persuading the powers that be to hold an appropriate debate on an appropriate day. She could not have picked a better day.
	Foreign ministers of the European Union, Latin America and the Caribbean countries have already gathered in Madrid for a meeting this evening. Tomorrow, the full summit of heads of state and government will begin. During the summit the EU will be holding separate meetings with representatives from the Mercosur countries, the Central American and Andean states and Mexico, as well as individual meetings with many countries—noble Lords will agree that they are important countries—including the Caribbean.
	Heads of state and heads of government from 48 countries will be at Madrid, together with foreign ministers and other representatives. It struck me that in replying to this debate, with 48 countries and 12 minutes in which to reply, I could speak for 25 seconds on each country. Mercifully not every country has been referred to. As the House will know, my right honourable friends the Prime Minister and the Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs, Denis MacShane, are representing the Government.
	I want to speak about the importance of Latin America and the Caribbean to this country. Our strong historical ties, have been emphasised by many speakers—I shall not try to add to what has been said—most notably by the noble Lords, Lord Thomas and Lord Moynihan, and my noble friend Lord Brennan. We have heard a tremendous depth of history and experience that we would do well to remember.
	Our current relationship is driven by a renewed emphasis on modern political, cultural and economic links and on significant trade with and investment in Latin America and the Caribbean. A number of noble Lords stressed the importance of the economy and of trade, particularly my noble friends Lord Lea, Lord Faulkner and Lord Brennan. Annually, our exports are worth some £2.5 billion and the list of British companies operating in the region reads like an A-Z of the FTSE 100. Brazil and Mexico are particularly important for UK exports.
	Political links with Latin America continue to grow. Between May 1997 and the end of 2000, over 70 British ministerial visits to the region took place. My noble friend Lord Lea rightly reminded me that not only are ministerial visits important, but also trade union visits and others. Last summer, the Prime Minister took relations an important step further when he visited Brazil, Argentina and Mexico, and had an extremely important meeting with Caribbean leaders in Kingston, Jamaica.
	With Brazil and Mexico, bilateral ties have been given additional impetus by regular high-level talks covering a range of global and regional issues. Brazil and Mexico are not just key players in Latin America. Their population growth and the size of their economy makes them increasingly important global players.
	Of course, there are problems. The issue of drugs was raised by the noble Lord, Lord Moynihan. There are also the problems of human rights and conflict resolution. They are important matters in our relationships with Latin America and the Caribbean. Drugs-related terrorism of both the left and the right threaten democracy in Colombia and could spill over into neighbouring countries. The influence of drugs and drug-related crime has dramatically affected the economic and political stability of the Caribbean, most notably in Jamaica. We all share a common interest in ensuring that the men of violence do not prosper and that democracy and the rule of law prevail. The importance of democratic institutions was repeatedly stressed, and rightly so, by my noble friend Lady Andrews.
	Our relationship with the Caribbean region is as strong as ever. My right honourable friend the Foreign Secretary paid full testament to the strength of that relationship in his opening remarks at the recent UK-Caribbean Forum in Guyana earlier this year. He underlined our readiness to engage with our friends in the Caribbean to tackle the many challenges that we face. The forum agreed to take forward work in a number of key areas: regional security; trade and investment; sustainable development; and health, especially the spread of HIV/AIDS.
	I turn to the purpose of the summit. It is the second event of its kind, following the first three years ago in Rio. I can give an absolute assurance—almost every speaker asked for an assurance on this point, and it is nice when one can stand at this Box and, hopefully, give an absolute assurance—that the Government attach tremendous importance to the summit and to the work that we hope that it will undertake.
	To recap on some of the events since the last summit, Rio gave political impetus to trade negotiations with Mexico, leading to entry into force of the EU-Mexico Association Agreement in October 2000. It also gave impetus to negotiations with Chile, the conclusion of which will be celebrated in Madrid—a point raised by the noble Baroness, Lady Hooper. Other examples of co-operation since Rio include human rights, higher education and many other important issues that time does not allow me to enumerate. My noble friend Lady Andrews mentioned the importance of education. The first EU-Latin America and Caribbean Ministerial Conference on Higher Education was held in Paris in November 2000.
	The summit's principal purpose will be to give political impetus to the process of building a deeper strategic relationship between the EU, Latin America and the Caribbean. That relationship will centre on the key issues where both regions have mutual interests and concerns. Those can be summarised under three headings that will provide the timetable and framework for the summit: political, economic and cultural, and there will be one session on each. Of course, we cannot anticipate precisely what the summit will endorse, but we hope that there will be a political declaration, a paper on common values, and an assessment of progress made on projects since the last summit.
	We have a real incentive for the summit to produce some practical commitments from everyone taking part. We want discussion at Madrid to focus on areas where the two regions can work together and can make a real difference. We want heads of government to agree to undertake a series of commitments that will benefit both regions that, above all, will be relevant to the interests and well-being of ordinary citizens in the two regions. That undertaking will form the political declaration to which I referred.
	The summit agenda is ambitious. Four areas are especially important to us and we very much hope that commitments in those areas will form part of the final communiqué. The noble Lord, Lord Moynihan, asked about the summit's objectives, and I shall touch on those four key ones. They are, first, terrorism and the international response to it. That will be no surprise to noble Lords. The second is agreement on moving forward on further world trade liberalisation following the Doha meeting. The third is agreement to work together to make a difference on sustainable development, not least in the run-up to the World Summit in Johannesburg. The fourth is the encouragement of more investment in the Latin American and Caribbean regions—never forgetting, as my noble friend Lady Andrews said, that it is not just a question of achieving economic growth but of ensuring that it is sustainable and coupled with strategies for the elimination of poverty.
	Throughout the preparation process, we have worked to keep those four areas in focus and to ensure that they receive adequate attention at the summit. As I said, we have agreed the themes for discussion, but of course not all countries approach the summit in exactly the same way. Some Caribbean countries are especially concerned that we should pay more attention to the special problems that their economies face. Some Latin American and Caribbean countries would like new trade agreements with the EU. There are calls for a greater EU commitment on aid to the region and a recognition that the disbursement of aid, especially in the Caribbean, needs to be speeded up and made more effective. Those are all complicated economic and political issues and we hope that they will get a good airing at Madrid.
	As was no surprise to anyone interested in the region, several speakers mentioned the problems of Argentina. The noble Lord, Lord Maclennan, described the situation well when he said that it is hard to exaggerate the awfulness of the economic disaster that has overtaken the region. The noble Baroness, Lady Rawlings, spelt out some of the consequences and tremendous difficulties caused by inflation.
	The Government are watching the economic crisis in Argentina with much concern. We support the efforts of President Duhalde's government to tackle the serious problems that they face. We have stressed to Argentina that it must do all that it can to carry through a sound and sustainable economic policy consistent with the criteria set out by the International Monetary Fund. We recognise that that may take time; no one underestimates the scale of the challenge that Argentina faces.
	I must say a word about the Caribbean. A key issue for the Caribbean is, of course, sustainable development. The region has requested our help in representing their concerns about the lack of attention that they receive in addressing their development needs. The UK is therefore pleased that sustainable development features prominently on the agenda for the summit and we look forward to the discussions, which we hope will lead to a greater awareness of the concerns of small states and allay the sense of marginalisation which Caribbean leaders have reported.
	Latin America and the Caribbean matter greatly to the UK and I hope that I have been able to reassure all those who have spoken in the debate in the short time that I have had. I welcome the opportunity provided by the debate for me and others to spell out the importance that we all attach to the region. We look forward to developing new and closer links with all the countries of the region. We want to work together to tackle some of the international problems and challenges that we will face this decade. We welcome the opportunity offered by the Madrid summit to make progress on those matters.

House adjourned at twenty-three minutes to nine o'clock.